In a significant turn of events, the Nigerian Naira has witnessed a sharp rise against the US Dollar, falling below the N1,000 mark for the first time since September 20, 2023, which marks 44 days ago. This development has sparked optimism in the country’s financial landscape.
The Naira’s resurgence was observed in the Peer to Peer (P2P) segment of the foreign exchange market. The P2P market primarily serves cryptocurrency platforms and Nigerians looking to purchase dollars through fintech apps.
The Naira exchanged at N999 against the US Dollar. This was in stark contrast to Thursday’s closing rate of N1,113 per US Dollar. The Naira’s impressive climb indicates an appreciation of N118 in just a few hours against the US Dollar.
The appreciation of the Naira can be attributed to recent actions taken by the Central Bank of Nigeria (CBN) to clear backlogs of foreign debts owed to international banks and companies. The Citi Bank, in a circular titled “Settlement of Matured FX Forwards by CBN,” confirmed the settlement of all outstanding matured forward FX contracts. This development has instilled confidence in the Naira’s stability and value.
Experts predict that the Naira is likely to continue making gains in the coming days, especially as the CBN anticipates an inflow of $10 billion to bolster the foreign exchange market. Taiwo Oyedele, in an interview with Bloomberg, disclosed that the federal government expects an exchange rate of N650 to N750 by December 2023. Similarly, global financial institution JP Morgan has forecasted a N850 to a dollar exchange rate by the end of the year.
In addition to the financial industry’s positive outlook, Bureau de Change (BDC) dealers have initiated measures to narrow the gap between the black market and official exchange rates, supporting the CBN’s efforts to stabilize the Naira in the foreign exchange market.
The Naira’s resurgence below the N1,000 mark is seen as a promising development for the Nigerian economy and its citizens, with hopes of increased economic stability in the months to come.