Untold Reasons Naira Is Rising

The Centre for Promotion of Private Enterprise (CPPE) has highlighted the reasons behind the recent appreciation of the Naira against the US Dollar.

According to Muda Yusuf, Director of CPPE, this improvement is linked to Nigeria’s growing external reserves and actions taken by the Central Bank of Nigeria (CBN).

Yusuf explained in a statement that the Naira strengthened significantly last week, rising from N1,660 to N1,535 per dollar between Monday and Friday. He attributed this change primarily to the rise in Nigeria’s external reserves, which have surpassed $40 billion in recent weeks.

He stated, “You can ascribe this to several issues. First, we have seen an improvement in our reserves, which reached the $40bn mark a few weeks ago, and that implies that the CBN has more power to intervene in the market. In truth, the CBN has been intervening in the market to stabilise the currency.”

Yusuf also acknowledged the positive impact of CBN’s reforms in the foreign exchange market, including the introduction of the Electronic Foreign Exchange Matching System (EFEMS). “I would like to observe that in the last five months or so, we have seen relative stability in the Naira exchange rate, which is a welcome development. Now, we are beginning to see a strengthening of the currency. The level of our reserves has contributed to this as it elevates the confidence of foreign investors.”

Additionally, he noted the role of increased autonomous foreign exchange inflows, particularly from international money transfer operators. “In the last few months, as a result of reforms in the foreign exchange market, we are seeing a consistent improvement in autonomous foreign exchange inflow in the country,” Yusuf added.

Other industry experts have linked the Naira’s recent gains to Nigeria’s success in raising $2.2 billion through Eurobonds in the international market. This development, they argue, has further bolstered the country’s financial stability and enhanced confidence in its economy.

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