In a significant development for Nigeria's financial landscape, the Central Bank of Nigeria (CBN) and other banking institutions have injected a substantial $2.5 billion into the foreign exchange market over the past two weeks. This influx of dollars has resulted in a strengthening of the naira, which now stands at N1,309 against the United States dollar.

Official figures from the FMDQ Securities Exchange indicate that the naira closed at N1,309/$1 on Thursday, marking a slight improvement from the N1,300/$1 recorded the previous day. Despite this uptick, the naira's value still hovers around an eight-week low against the US dollar, though it continues to demonstrate resilience and gain strength.

Trading activities were halted on Friday due to a public holiday, but the momentum in the forex market remained palpable. Forex transactions between willing sellers and buyers at the Nigerian Autonomous Foreign Exchange Market surged by an impressive 106% to reach $857 million by the close of Thursday's trading session. This surge represents the highest level of forex turnover since the implementation of the CBN's new forex policies, with the closest figure recorded at $760 million on June 2nd, 2022.

Throughout March, the average daily forex turnover has hovered around $220 million, showcasing a steady increase compared to previous months. Notably, this year has seen a daily average forex turnover of $177 million, indicating heightened activity and liquidity in the forex market.

The CBN's intervention in the forex market has played a pivotal role in bolstering liquidity and stabilizing exchange rates. Key reforms implemented by the apex bank include the unification of exchange rate windows, liberalization of the FX market, and clearance of FX backlog obligations for banks and airlines. Additionally, policies such as the Price Verification System, imposition of limits on banks’ Net Open Position, and overhaul of the Bureau De Change segment have contributed to restoring confidence and vibrancy in the forex market.

Forex turnover serves as a crucial metric in assessing the health of the financial market, providing insights into liquidity and market activity. High turnover rates signify a robust market with active participation from various stakeholders, signaling confidence and stability in the economy.

In response to suspected cases of excessive foreign currency speculation and hoarding, the CBN has taken proactive measures to address these concerns. The apex bank announced the complete clearance of valid foreign exchange backlog, settling obligations amounting to $1.5 billion to bank customers. This move has helped alleviate pressure on the forex market and contributed to the appreciation of the naira.

At the parallel market, the naira's appreciation against the US dollar is evident, with the dollar currently trading at N1,280. The recent foreign exchange policy measures implemented by the CBN have contributed to this positive trend, further reinforcing investor confidence in Nigeria's currency and financial market stability.