Naira gains against dollar as forex turnover hits $2.25bn

The Nigerian naira posted a modest weekly gain against the US dollar, closing Friday at ₦1,329.51/$, as official forex turnover rose 8.9% to $2.25 billion, despite the Central Bank of Nigeria cutting its benchmark interest rate from 26.5% to 23%. The CBN's rate cut on Tuesday, September 22, aimed to align policy with market rates, but raised questions about demand for naira assets due to lower potential returns. Trading activity strengthened, with transactions rising 14.2% to 1,351 deals, and Wednesday recording the week's strongest turnover at $732.45 million. The naira surrendered part of its gains over three consecutive sessions, finishing with a small improvement of ₦1.69 from the opening benchmark. The currency's recovery followed a difficult prior week, supported by gross external reserves climbing above $54.72 billion.