The naira made a significant recovery against the United States dollar as it traded at N450/$ on Friday, February 24, compared to the N525/$ it traded penultimate Friday.
It is understood that the local currency strengthened remarkably by N75 in just five days.
The development is coming on the back of efforts by the Central Bank of Nigeria (CBN) to sustain its defense of the naira.
The Apex Bank on Thursday sold $221,371,218.04 to banks in its second special wholesale intervention forwards since the new foreign exchange (FX) policy actions were announced a week ago.
A breakdown of the amount sold by the CBN showed that it auctioned $162,850,000 to 10 banks in a transaction with 30 days tenor, while six banks participated in a separate auction with 60 days tenor in which $58,521,217.04 was sold.
Following the improved FX liquidity, some market analysts were cautiously optimistic yesterday that the naira could climb to N400-N425 to a dollar in the coming days.
Should this happen, the CBN would meet its objective of closing the gap between the interbank and parallel market rates.
Speaking on the development, the acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the CBN’s intermediation in the FX market through the wholesale interventions was aimed at easing the pressure on Nigerians who need to meet obligations that fall under visible and invisible transactions.
Okorafor further expressed optimism that the wholesale intervention of the CBN would substantially ease pressure on the FX market.