Naira Strengthens In Official Market Amid Forex Reforms

The official foreign exchange (FX) market witnesses signs of naira strengthening, currently valued at N1,560.57 against the dollar, marking a 0.79 percent appreciation from the previous day’s rate of N1,572.86 at the Nigerian Autonomous Foreign Exchange Market (NAFEM). This positive shift reflects the impact of recent FX reforms.

According to data from the FMDQ Securities exchange, the naira has exhibited significant recovery, appreciating by 4.28 percent since hitting a low of N1,627.40 per dollar on March 8, 2024. Tuesday’s trading session displayed an intraday high of N1,626.50 per dollar, with a notable strengthening observed at the low end at N1,415 per dollar, indicating a volatile yet improving trend….READ ALSOMoghalu Advocates For $30bn IMF Stabilization Loan Amid Forex Crisis

The total foreign exchange market turnover surged to $195.13 million on Tuesday, emphasizing a lively trading atmosphere. Similarly, the parallel or black market echoed the naira’s resilience, strengthening to N1,570 per dollar from the previous day’s close of N1,590.

Market analysts anticipate continued naira stabilization, crediting the optimism to recent policy measures by the Central Bank of Nigeria (CBN). These reforms target FX market unification, promoting a willing buyer-willing seller framework, eliminating remittance margin restrictions, introducing a two-way quote system, and restructuring the Bureau De Change (BDC) sector to enhance market stability and transparency.

CBN Governor, Oluyemi Cardoso, voiced confidence in the potential of these strategic adjustments to attract capital inflows, boost liquidity, and reinforce the currency. Furthermore, Nigeria’s external reserves expanded by 3.62 percent, reaching $34.37 billion as of March 12, supported by a notable surge in Diaspora remittances, which soared by 433 percent to $1.3 billion in February.

In a recent Monetary Policy Committee (MPC) meeting, key financial metrics were recalibrated, including a 400 basis point increase in the Monetary Policy Rate (MPR) to 22.75 percent, aimed at tackling inflation and stabilizing the naira.

The revisions signify a comprehensive approach aimed at attaining economic stability and expansion, echoing the sentiments expressed by MPC member Aloysius Uche Ordu regarding the necessity of breaking the inflationary trend.