Naira Appreciates To N1,278/$1 In Parallel Market As CBN Policies Pay Off

The Nigerian currency, Naira, has kicked off the month of April on a strong note, with a significant appreciation against the United States dollar.

The latest data from FMDQ Securities indicates that the Naira closed at N1,278.58 against the dollar, marking an increase of N30.81 from the previous week’s close.

Experts attribute this positive trend to a series of policies implemented by the Central Bank of Nigeria (CBN) aimed at boosting liquidity and stabilizing the foreign exchange market. Since March, the Naira has witnessed a remarkable gain of over 21 percent against the dollar, reflecting improved investor confidence and economic stability.

One of the key reforms driving this surge is the unification of exchange rate windows, along with the liberalization of the FX market.

Additionally, the clearance of FX backlog obligations for banks and airlines, implementation of a Price Verification System, and other measures have contributed to increased liquidity in the forex market.

Currency traders have welcomed the CBN’s decision to directly sell foreign exchange to operators, which has helped meet the demand for dollars and consequently reduced pressure on the Naira. Ibrahim Yahu, a BDC operator, stated, “The demand for dollars has really gone down and the Naira is appreciating because of the new rate determined by the CBN for traders.”

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Malam Yunusa, another trader, expressed confidence in the Naira’s continued strength against the dollar, emphasizing that operators are supportive of its growth. Aminu Gwadabe, President of the Association of Bureaux de Change Operators of Nigeria, highlighted the positive impact of reactivating BDCs in enhancing dollar liquidity in the retail segment of the forex market.

Looking ahead, analysts predict that the Naira will maintain its current trajectory in April, as the CBN remains committed to its policies aimed at attracting more capital and ensuring stability in the foreign exchange market.

With increased investment in government instruments and ongoing efforts to clear forex backlog commitments, the Naira is expected to sustain its recent gains against the dollar.

Overall, the strengthening of the Naira against the dollar reflects a positive outlook for Nigeria’s economy, signaling improved confidence among investors and stakeholders in the country’s financial market.