The Nigerian naira has made significant gains against the United States dollar, appreciating by 8.24% within a week.
This improvement is attributed to the introduction of the Central Bank of Nigeria’s (CBN) new foreign exchange platform, which has facilitated more transparent trading and bridged the gap between the official and parallel markets.
According to data obtained from the CBN’s website, the closing exchange rate rose from N1,672.69 per dollar on Friday, November 29, 2024, to N1,535/$ at the end of the week on Friday, December 6, 2024. This represents a gain of N137.69 against the dollar.
The naira’s appreciation is also attributed to higher liquidity and stability in the foreign exchange market. The CBN’s platform has introduced an automated trade-matching system, which improves market integrity and facilitates better price discovery.
Throughout the week, the naira saw a steady boost in its exchange rate, with fluctuations each day. The exchange rate rose by 0.76% to N1,660/$ on Monday, December 2, and continued to strengthen against the dollar throughout the week.
The improvement in the naira’s value has been welcomed by some members of the Organised Private Sector, who have urged the CBN to sustain the gain. They argue that this would benefit the Nigerian economy.
In addition to the introduction of the new FX platform, Nigeria’s return to the international bond market has also contributed to the naira’s appreciation. The country raised $2.02 billion through Eurobonds sold in two tranches, which was oversubscribed by $9.01 billion. This has significantly boosted liquidity for the local currency.
