Nigeria's central bank governor said on Tuesday that measures to boost dollar liquidity were starting to make a difference, as he said the volume of foreign exchange transactions had exceeded $800 million for the first time in years on Monday.

Dollar shortages are a major constraint in Africa's largest economy and have pushed its naira currency to record lows in recent weeks.

Central bank governor Olayemi Cardoso told a parliamentary hearing: "We are aware that the twin challenges of inflation and exchange rate depreciation ... are daunting. However, they are not insurmountable."

He added that the improvement in dollar liquidity would become increasingly apparent.

Last month, Cardoso said the central bank aimed to rein in inflation to about 21%, after it struck its highest level in more than 27 years in December at almost 29%.

At the same hearing on Tuesday, Finance Minister Wale Edun said the country's oil output was at 1.65 million barrels per day and was rising because of security measures the government had put in place to curb oil theft.

(Reporting by Elisha Bala-Gbogbo and Camillus Eboh; Editing by Alexander Winning)