ABUJA — The naira strengthened in Nigeria's foreign-exchange market as improved dollar liquidity supported trading conditions, offering some relief to businesses and importers that have faced elevated costs from currency volatility. The movement came amid the Central Bank of Nigeria's continuing efforts to improve the functioning of the foreign-exchange market and strengthen confidence in the currency. Foreign-exchange availability has been a major issue for Nigeria's economy since the government introduced significant reforms to the currency market. The reforms were designed to reduce distortions between official and unofficial exchange rates and allow market forces to play a greater role in determining the value of the naira. The adjustment initially produced substantial volatility as businesses and consumers adapted to a weaker currency. A more stable exchange rate is important for Nigerian businesses because many companies depend on imported machinery, raw materials, equipment and other inputs. When the naira loses value, the local cost of those imports rises, increasing operating expenses and often feeding into consumer prices. Importers therefore closely monitor movements in the foreign-exchange market when planning purchases and setting prices. Greater dollar liquidity can help reduce some of that uncertainty. The Central Bank has used a combination of monetary measures and market interventions to improve liquidity and strengthen confidence in the foreign-exchange market. Authorities have also worked to increase transparency and reduce opportunities for manipulation. The effectiveness of those measures depends on the availability of foreign currency from exports, investment and other legitimate sources. Nigeria's oil industry remains particularly important because crude exports generate a large share of the country's foreign-exchange earnings. Higher oil production and stronger export receipts can increase the supply of dollars available to the economy. The government has therefore placed considerable emphasis on restoring crude production after years of losses caused by theft, vandalism and operational difficulties. Non-oil exports are also important to the long-term stability of the currency. Expanding agriculture, manufacturing and services can provide additional sources of foreign exchange and reduce the economy's dependence on crude oil. The government has encouraged exporters to bring foreign-exchange proceeds into the formal market as part of efforts to strengthen supply. Remittances from Nigerians living abroad provide another important source of foreign currency. Millions of Nigerians receive funds from relatives and other contacts overseas, and the formal processing of those inflows can contribute to liquidity in the domestic market. Financial institutions have therefore been encouraged to make official channels more attractive and efficient. The movement of the naira also has implications for inflation. Nigeria has experienced substantial increases in consumer prices in recent years, with food, transportation and imported goods among the areas affected by higher costs. A more stable currency can reduce the pace at which imported inflation feeds into domestic prices, although exchange-rate stability alone cannot resolve the country's broader inflation problem. Businesses still face high energy, transportation and financing costs. The government has continued to argue that the foreign-exchange reforms will produce stronger economic conditions over time. Supporters say the previous system created distortions and discouraged investment by making it difficult for businesses to obtain foreign currency at predictable rates. Critics have pointed to the immediate economic pain caused by the adjustment and called for stronger measures to protect households and small businesses. The latest movement in the naira therefore needs to be viewed within the broader reform process rather than as a final indication of long-term currency stability. Sustained improvement will depend on stronger foreign-exchange supply, disciplined monetary policy and increased confidence among investors and businesses. Higher oil production, growing non-oil exports and increased formal remittance inflows could all support that objective. For consumers and companies, the immediate benefit of improved currency stability would be greater predictability when planning expenses and investments. For the government, a more orderly foreign-exchange market could strengthen investor confidence and support economic planning. The Central Bank will nevertheless face continued pressure to maintain liquidity while balancing exchange-rate objectives against inflation and other economic priorities. Nigeria's currency market remains closely linked to developments in oil production, global energy prices, capital flows and domestic economic policy. The recent strengthening of the naira provides some relief, but maintaining that improvement will require sustained progress across those areas.