The naira posted slight gains in Nigeria’s official market, appreciating N1,548.59 against the U.S. dollar. Meanwhile, the U.S. Dollar Index dropped to monthly lows due to expected U.S. Federal Reserve rate cuts. Central Bank Governor Cardoso credits forex reforms for the naira's stability.
On Thursday, the naira gained marginally against the U.S. dollar, trading at N1,548.59 in the official market, up by N4 from the previous day's rate of N1,552.58. However, the currency remained stable in the parallel market at N1,660. Central Bank Governor Olayemi Cardoso credited recent forex reforms for the naira's stability, citing a surge in international remittances and addressing challenges like dwindling foreign exchange reserves and falling oil prices. Cardoso emphasized the importance of creative solutions to Nigeria's economic difficulties, including clearing $7 billion in forex commitments and unifying exchange rates.
Meanwhile, the U.S. Dollar Index, which tracks the dollar's performance against major currencies, dipped to a monthly low. The index fell below 107.8, driven by expectations that the Federal Reserve may lower borrowing costs due to inflation pressures in the U.S.
Additionally, U.S. President Donald Trump’s remarks at the World Economic Forum in Davos, where he suggested a potential trade deal with China, also weakened the dollar. Analysts anticipate the Fed may ease policy further, contributing to the dollar's decline. The U.S. dollar has now seen losses for two consecutive weeks, signaling a shift in market sentiment.
