The Naira gained strength in the official foreign exchange market on Friday, closing at N1,492.49 per Dollar. This reflects a N6.57 appreciation from the previous day when it traded at N1,499.07 per Dollar.
Data from the Central Bank of Nigeria (CBN) shows that the local currency has remained relatively stable in recent weeks. This is largely due to ongoing reforms aimed at making the foreign exchange (FX) market more transparent.
Friday’s closing rate also marks a 0.44 percent increase compared to Thursday. Earlier in the week, the Naira ended Wednesday’s trading at N1,499.11 per Dollar, showing consistent improvement over the past few days.
While the recent stability is a positive sign, some experts believe it is too early to celebrate. Prof. Jonathan Aremu, a former CBN director and an economic relations professor at Covenant University, acknowledged the progress but warned that the Naira has also seen moments of depreciation within the same period.
“But it may not be time to celebrate yet because, within this period, we have also seen moments when the Naira depreciated,” he said.
Aremu stressed that sustaining the Naira’s gains requires boosting local production. He urged the CBN to look beyond monetary policy and focus on other economic factors that influence currency value.
“The quantity theory of money states that money supply and population value must equal price and transaction volume in the economy.
“If policy only targets money supply without increasing transactions, the expected appreciation of the Naira will not materialise.
“The economy needs a higher volume of goods and services.
“Many goods are available, but their prices depend on supply and demand.
“Focusing only on monetary policy is insufficient.
“More emphasis should be placed on increasing production,” he explained.
Aremu further noted that increasing production would help reduce the demand for foreign currencies, which in turn would strengthen the Naira.
“The CBN should not only focus on reducing money supply but also support the availability of quality goods and services,” he added.
