Nigeria's currency, the Naira, is poised on the brink of a significant milestone, edging closer to the 1,000 Naira to 1 US dollar mark on the black market, as it surged to N1,115 on Monday, with some traders quoting rates as high as N1,118 and N1,120.
This surge follows a four-month high of 1,142.38/$ on the official foreign exchange market last Friday, attributed to increased dollar supply. The Naira's recent appreciation is attributed to FX reforms by the Central Bank of Nigeria (CBN), which aimed to bolster liquidity in the market.
Analysts at Afrinvest anticipate further strengthening of the Naira, citing CBN's efforts to resolve forex backlogs and increased inflows into the NAFEM, reaching $3.75 billion. Additionally, the CBN's recent exchange rate review for Bureau De Change (BDC) Operators and plans to sell $15.88 million to eligible BDCs signal proactive measures to stabilize the currency.
The CBN's decision to raise its benchmark interest rate by 200 basis points last month further underscores efforts to control inflation and ensure Naira stability. As the Naira's value continues to fluctuate, these developments herald potential economic shifts and challenges on the horizon.
