Against so many negative believes and projections about the Naira, the currency has started appreciating against the US Dollar.
The value of the Naira against the Dollar rose significantly by over 20% in one month.
Naira appreciated against the US dollar throughout March 2024, to mark a major turnaround for Nigeria’s exchange rate.
The Naira closed in the official market at ₦1309/$1 on the last trading day, up from ₦1595.11/$1 at the end of February 2024.
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This 21.8% gain points to the success of several forex policies, strategies and interventions by the Central Bank of Nigeria.
The CBN adopted all these policies to stabilise and strengthen Nigeria’s local currency, the naira.
In the parallel market, the Naira saw an even more pronounced recovery.
The exchange rate improved from ₦1600/$1 in February to ₦1250/$1 in March.
This represents a 28% gain in one month revealing how effective the measures taken to bridge the gap between the official and unofficial currency markets.
The gains in the official and parallel market are the largest seen in over 5 years.
Before now, the exchange rate was fixed at about ₦450/$1 for almost two years and around ₦380/$1 between 2020 and early 2021.
Drivers of the Naira’s Appreciation
On the official market, the apex bank addressed suspected cases of excessive foreign currency speculation and hoarding from Nigerian banks.
The apex bank also announced the complete clearance of the valid foreign exchange backlog.
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On the retail end of the market, policies such as allocating $20,000 to Bureau De Change (BDC) operators have been pivotal in strengthening the exchange rate on the retail end.
Also, as part of measures to manage demand in the retail end of the market, the CBN placed.
