The Naira has seen steady appreciation over the past 21 days, reflecting improved stability in Nigeria’s foreign exchange market.
On Friday, FX dealers in Lagos' parallel market traded the naira at N1,490/$, marking a significant gain from N1,620/$ recorded at the beginning of the month.
On the official Nigerian Foreign Exchange Market (NFEM), the naira closed at N1,502/$.
Financial expert Prof. Uche Uwaleke, President of the Capital Market Academics of Nigeria (CMAN), attributed the naira’s recent stability to Central Bank of Nigeria (CBN)-led initiatives, including the forex matching system, electronic matching system, and the FX code of conduct.
He emphasized that these measures have enhanced transparency and boosted investor confidence in the forex market.
“Specifically, I’m referring to the BMatch electronic matching system, and the FX code of conduct. These initiatives have improved transparency and put banks on their toes, knowing that any breach of the code will result in sanctions. That has gone a long way in stabilising the market,” Uwaleke said.
He also highlighted the impact of increased remittances and foreign portfolio investments, noting that CBN’s engagement with international money transfer operators has boosted forex inflows.
“Foreign investments, particularly foreign portfolio investments, have also played a role in improving forex liquidity and, by extension, exchange rate stability. So, I would attribute the current stability in the exchange rate primarily to the CBN’s reforms,” he added.
When asked about the sustainability of the naira’s stability, Uwaleke expressed optimism, citing rising oil production and steady crude prices as crucial factors.