The naira has appreciated significantly against the US dollar recently, strengthening by over N200 from an exchange rate as high as N1,780 to N1,500 in the past week.
Nigerians have celebrated the currency’s strong performance in recent times, which has renewed hope for the Central Bank of Nigeria’s (CBN) exchange rate policy.
Speaking with TimesNow.com.ng on the naira’s recent surge, Aminu Gwadabe, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), lauded the government and the Central Bank of Nigeria (CBN) for their efforts.
However, he explained that the primary driver of the naira’s appreciation is the renewed confidence of portfolio investors in Nigeria’s economy.
According to Gwadabe, the oversubscription of various government-issued bonds has induced a massive inflow of dollars, boosting the countryâs foreign exchange reserves and strengthening the naira.
He added that the launch of the CBN’s Electronic Foreign Exchange Management System (EFEMS) was another crucial factor.
He noted that the platform has introduced much-needed transparency to Nigeria’s foreign exchange market, curbing speculative activities, currency substitution, and frivolous dollar demands.
He added that diaspora remittance inflows are rising, facilitated by financial technology platforms and International Money Transfer Service Operators (IMTOs).
This surge, he explained, has injected liquidity into the retail foreign exchange market, which has historically been volatile.
TimesNow.com.ng also reported that the Central Bank of Nigeria has decided to reduce the exchange rate for importers clearing goods.
The decision followed the strong performance of the naira in the official and unofficial FX markets, renewing cost hopes.
Proofreading by James, Ojo Adakole, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
