The naira has surged against the US dollar, now quoted at N1,560.57 on the official market. This upward momentum reflects a strengthened naira, propelled by recent foreign exchange (FX) reforms implemented by the government.
Data from Tuesday’s FX trading session revealed a 0.79 percent appreciation of the naira, with the dollar quoted at N1,560.57. This marks a significant improvement from the N1,572.86 quoted on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Over the past few weeks, the naira has demonstrated resilience, gaining 4.28 percent of its value against the dollar since hitting a low of N1,627.40 per dollar on March 8, 2024, as reported by the FMDQ Securities exchange.
During Tuesday’s trading session, the intraday high closed at N1,626.50 per dollar, while the intraday low closed at N1,415 per dollar. The daily foreign exchange market turnover reached $195.13 million.
Similarly, at the parallel market, commonly known as the black market, the naira continued to strengthen, reaching 1,570 per dollar compared to 1,590 on Monday.
The positive performance of the naira is attributed to recent policy measures introduced by the Central Bank of Nigeria (CBN) to enhance stability and transparency in the FX market. These measures include the unification of the foreign exchange market, promotion of a willing buyer willing seller market, removal of limits on margins for International Money Transfer Operator (IMTO) remittances, and reforms in the Bureau De Change (BDC) segment.
Oluyemi Cardoso, the CBN governor, expressed optimism about these reforms, stating that they hold the potential to attract capital inflows, enhance liquidity, and bolster the currency in the immediate term.
Moreover, Nigeria’s external reserves have experienced steady growth, reaching $34.37 billion as of March 12, 2024, up from $33.17 billion recorded in early February. The recent surge in Diaspora remittances, soaring by 433 percent to $1.3 billion in February, further contributes to the easing pressure on the naira/dollar exchange rate.
Despite these positive developments, challenges persist, and experts emphasize the need for sustained efforts to stabilize the exchange rate and curb inflation. Aloysius Uche Ordu, a member of the Monetary Policy Committee (MPC), underscored the importance of breaking the inflation cycle for sustained economic growth.
In light of ongoing discussions, Ifeanyi Stephen, a personal finance expert, highlighted the critical role of supply in achieving stability, urging stakeholders to focus on addressing supply-demand imbalances to foster a truly stable naira.
