The naira appreciated by N137.69 against the US dollar within a week, buoyed by the Central Bank of Nigeria’s (CBN) newly implemented foreign exchange platform.
According to data from the CBN, the naira closed at N1,535/$ on Friday, December 6, 2024, a significant improvement from N1,672.69/$ recorded on November 29, 2024, reflecting an 8.24% gain in value.
The currency’s resurgence is credited to the operationalisation of the Bloomberg BMatch system, which facilitates automated trade matching, enhancing transparency and stability in Nigeria’s FX market.
Steady Gains Throughout the Week
The naira strengthened consistently over the week, beginning at N1,660/$ on Monday, December 2, 2024, and peaking at N1,535/$ by week’s end. The introduction of a minimum tradable amount of $100,000 and incremental clip sizes of $50,000 under the CBN’s guidelines further streamlined trading.
On the parallel market, the naira showed a sharp recovery, trading at N1,570/$ by Friday, down from N1,700/$ earlier in the week.
CBN’s Eurobond and Reserves Bolster Confidence
Nigeria’s recent return to the international bond market contributed to the naira’s strength. The $2.02 billion raised through oversubscribed Eurobonds has significantly increased dollar liquidity.
Additionally, the country’s foreign reserves, which recently hit $40 billion, have empowered the CBN to stabilize the naira through market interventions.
Private Sector Applauds Currency Strength
Members of the Organised Private Sector (OPS) commended the naira’s appreciation, highlighting the positive impact on inflation, the cost of doing business, and investor confidence.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, noted that the currency’s improvement stems from higher reserves and reforms in FX management, urging the government to maintain fiscal discipline to sustain the gains.
Adeyemi Oyerinde, Director-General of the Nigeria Employers’ Consultative Association, echoed the sentiment, calling for increased oil production, promotion of non-oil exports, and encouragement of domestic refining to reduce pressure on the naira.
Outlook for the Naira
The naira’s strong performance has renewed optimism for economic stability, with stakeholders urging collaborative efforts between fiscal and monetary authorities to sustain the currency’s momentum.
As Nigeria navigates its FX reforms, the private sector remains hopeful for sustained gains, recognizing the potential for a stronger and more stable economy.