The Centre for Promotion of Private Enterprise (CPPE) has attributed the recent massive appreciation of the Naira against the US Dollar to a surge in Nigeria’s external reserves and strategic interventions by the Central Bank of Nigeria (CBN).
According to CPPE Director Muda Yusuf, the Naira gained N127 last week, closing at N1,535 per dollar on Friday, compared to N1,660 the previous Monday. This marked one of the most significant recoveries for the Naira in recent times.
Yusuf explained that Nigeria’s external reserves, which surpassed $40 billion in recent weeks, have bolstered the CBN’s capacity to stabilize the foreign exchange market through interventions. Additionally, the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the CBN has enhanced liquidity and stability in the market.
“You can ascribe this to several factors,” Yusuf stated. “First, we’ve seen improvements in external reserves, which elevate foreign investors’ confidence. Second, reforms in the foreign exchange market have boosted autonomous forex inflow, particularly from international money transfer operators.”
Experts have also linked the Naira’s rebound to the federal government’s success in raising $2.2 billion through a Eurobond issuance, which has strengthened confidence in Nigeria’s financial markets.
Yusuf further noted, “Over the past five months, the Naira exchange rate has stabilized significantly, and now we are seeing a strengthening of the currency. These developments reflect the positive impact of reforms and strategic market interventions.”
The Naira’s rally comes as a relief to businesses and households heavily impacted by the prolonged forex instability. Analysts anticipate sustained improvements if reforms continue to foster inflow and bolster investor confidence.
