Naira Strengthens Amid Economic Interventions and Foreign Reserve Growth

The Naira has recorded significant gains against the dollar in recent weeks, attributed to strategic interventions by the Central Bank of Nigeria (CBN) and growth in the country’s foreign reserves.

In a statement released on Sunday, Muda Yusuf, Director of the Centre for Promotion of Private Enterprise (CPPE), highlighted that the Naira closed at ₦1,535 against the dollar last Friday, an improvement from ₦1,660 the previous Monday.

The CPPE attributed this progress to a combination of factors, including Nigeria’s external reserves surpassing $40 billion and the CBN’s introduction of the Electronic Foreign Exchange Matching System (EFEMS).

“An improvement in our reserves, which reached the $40bn mark a few weeks ago, has given the CBN more power to intervene in the market. As a result, the exchange rate has experienced relative stability over the last five months,” Yusuf explained.

He further noted that reforms in the foreign exchange market have led to a steady rise in autonomous forex inflows, particularly from international money transfer operators, boosting confidence in the Naira.

Industry analysts have also linked the strengthening of the Naira to the federal government’s recent success in raising $2.2 billion through Eurobond on the global market. This development is seen as bolstering foreign investor confidence and increasing forex liquidity in the market.

While these gains signal progress, experts urge sustained efforts to consolidate stability and promote policies that encourage long-term economic growth.