The naira experienced a significant surge in value against the dollar in both the parallel and official foreign exchange markets on Monday, just ahead of the Christmas holiday period.
This marked a welcome development for the nation’s currency, as it showed notable improvement following a period of relative volatility.
Abubakar Alhasan, a Bureau de Change operator based in Wuse Zone 4, Abuja, shared insights with DAILY POST, stating that the naira closed at ₦1,640 per dollar on Monday, a substantial gain from ₦1,775 per dollar recorded on Friday the previous week. This represents an appreciation of ₦135, which is a considerable shift in the exchange rate. The sudden jump was seen as a positive sign for the currency, particularly ahead of the festive season when foreign exchange demand typically spikes due to increased travel, remittances, and holiday-related transactions.
In the official market, the Central Bank of Nigeria’s foreign exchange data also indicated a modest strengthening of the naira. On Monday, the naira rose to ₦1,539.55 per dollar from ₦1,541.68 on Friday. Although the shift in the official market was not as dramatic as in the parallel market, it still represented a slight improvement, which experts believe could help stabilize the exchange rate in the coming weeks.
This appreciation of the naira comes amidst a period of heightened economic activity as the country prepares for the festive season. The Nigerian government declared three days of public holidays starting on Monday to mark this year’s Christmas and New Year celebrations. These holidays are typically associated with increased travel and spending, which often leads to greater demand for foreign currency, particularly the dollar. However, the recent strengthening of the naira could help ease some of the pressure on both the official and parallel markets during this period.
Economists and analysts are closely monitoring these developments, noting that while the naira’s recent gains are promising, sustained stability will depend on factors such as government policies, foreign exchange reserves, and the broader global economic environment. Despite the positive signs, the naira has faced a tumultuous period in recent years, and many are cautious about how long this upward trend may last.
In the short term, the appreciation of the naira is seen as a positive sign for consumers, businesses, and the economy, as it could reduce the cost of imports and provide some relief in terms of inflationary pressures. However, for many Nigerians, the challenge of managing the high cost of living and the broader economic instability remains a key concern, and there is hope that further strengthening of the naira will contribute to improved economic conditions in the country.
