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| Naira's upward journey in the Forex market |
Let’s be honest, the naira has not been the most pleasant friend to us in recent times. But things are changing, and for once it is changing for the better. The naira made a strong comeback on December 6, 2024; the exchange rate at the official EFEM market stood at N1,535 to one dollar, which is a great improvement from previous rates. This is not a figure; this is a lifesaver for firms, people, and even those who watch forex casually while holding their breath.
Now, here’s where it gets interesting: this marks the third consecutive day of gains for the naira. Thanks to the Enhanced Foreign Exchange Market System (EFEMS) introduced by the Central Bank of Nigeria, the currency seems to have found its groove. EFEMS is like the new kid in town shaking things up, and so far, it’s doing a pretty solid job. Sellers are now struggling to find buyers a clear sign that demand for dollars is cooling while supply is heating up.
A Trading Day to Remember
Friday wasn’t just another day at the Forex office. The naira’s intra-day high hit N1,575, while the low stood at N1,510, with an average trading rate of N1,533. These numbers might not make headlines globally, but for Nigerians watching their currency regain some dignity, it’s a big deal.
Why This Matters
If you have ever had to switch from naira to dollars or vice versa, then you will understand what I am talking about when I talk of volatility in the market. It is therefore easier for businesses that import goods, students paying their tuition fees in foreign universities, and tourists planning their next holiday when the naira appreciates. It also provides some relief to the economy, which has been facing inflation and depleting forex reserves.
But before we start celebrating and staying attended, the champagne appreciation, let’s make currency sure, is to a fragile dance, and the consistency is, however, the hopeful main highlighting question. The fact that this is a welcome development even though there are still some issues that need to be observed in the economy.
What to Expect?
Will the naira continue the recent momentum, or is it a flash in the pan? This is the million-dollar question; however, for the time being, it is something to celebrate. After all, we have all had more than our fair share of worrying about what may happen.