The true factors behind the significant appreciation of the Naira against the dollar, according to the CPPE.

In recent weeks, the Naira has experienced significant appreciation against the U.S. dollar, a development largely attributed to enhancements in Nigeria’s external reserves and proactive measures implemented by the Central Bank of Nigeria (CBN). Muda Yusuf, Director of the Centre for Promotion of Private Enterprise (CPPE), elaborated on these factors in a statement released on Sunday.

As of last Friday, the Naira gained an impressive N127 to close at N1,535 per dollar, a stark contrast to its valuation of N1,660 just a week prior. This notable shift reflects both an increase in Nigeria’s external reserves, which have surpassed the $40 billion threshold, and the CBN’s strategic interventions to stabilize the currency.

Yusuf emphasized, “This improvement in our reserves implies that the CBN has greater capacity to intervene in the market. Indeed, we have witnessed the CBN intervene consistently.” The last five months have shown relative stability in exchange rates, which Yusuf considers a welcome trend. He noted that the improved reserve levels bolster investor confidence, further supporting the Naira’s strength.

The introduction of the Electronic Foreign Exchange Matching System (EFEMS) has also been pivotal in enhancing market stability. Coupled with governmental successes in the international finance arena—most notably, the recent $2.2 billion Eurobond issuance—the conditions for a robust Naira have been bolstered.

As the economic landscape continues to evolve, the CPPE remains optimistic about the trajectory of the Naira and its potential for further stability in the foreign exchange market.