By Onu Okorie

The naira extended its recent gains against the United States dollar on the official foreign exchange market, as increased trading activity and improved dollar liquidity supported the local currency on Tuesday.
The Nigerian Foreign Exchange Market (NFEM) rate stood at about ₦1,350.60 to the dollar on Tuesday, August 18, according to current exchange-rate data. Market data showed the currency remaining around the ₦1,350/$ level after strengthening in the previous session.
The latest movement followed a stronger performance on Monday, when the naira appreciated by ₦8.07, or 0.59 per cent, to close at ₦1,349.54/$, compared with ₦1,357.61/$ on Friday.
A major feature of Monday’s session was the sharp increase in foreign exchange transactions. Turnover on the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose to approximately $1.41 billion, its highest level in five weeks and the strongest since July 21, when turnover reached $1.53 billion.
The increased market activity comes as the Central Bank of Nigeria CBN continues efforts to improve liquidity and strengthen the functioning of the official foreign exchange market.
The naira also recorded gains against other major currencies on Monday. It appreciated against the pound sterling to ₦1,830.11/£, from ₦1,840.10, while it strengthened against the euro to ₦1,564.79/€, compared with ₦1,571.70 previously.
Despite the improvement at the official window, a gap remains between official and parallel-market rates. The latest available parallel-market quotations put the dollar at about ₦1,407 for buying and ₦1,420 for selling, according to market reports.
The narrowing and widening of the gap between the two segments remains an important indicator for businesses and investors, particularly importers and companies whose operations depend heavily on foreign exchange.
The naira’s latest performance also comes against a mixed global backdrop. The US dollar was broadly subdued against major currencies on Tuesday as softer US economic data encouraged expectations that the Federal Reserve may adopt a less hawkish interest-rate stance. At the same time, geopolitical tensions and elevated oil prices continued to create uncertainty across global financial markets.
For Nigeria, stronger FX turnover and a relatively firm naira could provide some relief to businesses facing foreign-exchange costs. However, the sustainability of the currency’s recent gains will depend on the availability of dollar liquidity, market demand and broader macroeconomic conditions.
With the naira trading around the ₦1,350/$ mark, market participants are now watching whether increased FX liquidity can sustain the currency’s recent recovery and further reduce volatility in the domestic foreign exchange market.