The Centre for Promotion of Private Enterprise (CPPE) has highlighted the key reasons behind the recent significant appreciation of the Naira against the US Dollar.
According to the organization, the currency’s improved performance can be attributed to the rise in Nigeria’s external reserves and strategic measures implemented by the Central Bank of Nigeria (CBN).
Muda Yusuf, Director of CPPE, explained these developments in a statement released on Sunday. His comments follow the Naira’s impressive gain of N127, closing at N1,535 per dollar last Friday, compared to its earlier rate of N1,660 on Monday of the same week.
CPPE stated that Nigeria’s external reserves recently surpassed $40 billion, a milestone that strengthens the CBN’s ability to stabilize the foreign exchange market. The organization also noted the impact of the CBN’s introduction of the Electronic Foreign Exchange Matching System (EFEMS), which has enhanced transparency and efficiency in the FX market.
“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, and in truth, the CBN has been intervening in the market to stabilise the currency.
“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, so the level of our reserves has contributed to this as it elevates the confidence of foreign investors.
“Then, 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, especially from the international money transfer operators.”
