The Traffic

"Naira Surges Against Dollar: CBN Intervention Sparks Hope for Currency Rebound"

Yakubu Haruna Yakubu 

The Nigerian naira has made a significant comeback against the US dollar, marking a strong start to the week in the foreign exchange market. This recovery follows an intervention by the Central Bank of Nigeria (CBN), aimed at bolstering dollar supply and stabilizing the struggling currency.

Data from the Nigerian Autonomous Foreign Exchange Market (NAFEX) showed the naira trading at N1,600.78 to $1, improving from the previous session's rate of N1,660.49 to $1. This gain was driven by a 6.2% increase in forex liquidity, with dollar supply rising to $350.72 million, up from $330.18 million.

Despite the CBN’s efforts, the naira’s performance in the parallel market showed a slight dip, weakening by N10 to sell at N1,715 per dollar. This fluctuation was attributed to high demand, particularly with many Nigerians preparing for year-end travel. Abdulhaii, a Bureau de Change trader, confirmed the increased demand, saying, "We sold the dollar at over N1,700/$1 due to high demand. During this period, many Nigerians will be traveling, creating real demand."

While the naira showed resilience against major foreign currencies like the pound sterling and the euro in the official market, staying flat at N2,153.90/£1 and N1,791.06/€1 respectively, analysts remain optimistic about further improvements.

Government officials have expressed confidence in ongoing economic reforms, with Budget Office Director Ben Akabueze stating that the Tinubu administration expects these policies to yield results by 2024, paving the way for a more stable exchange rate.

As Nigeria looks to increase its dollar supply and implement key financial reforms, the coming months could see further strengthening of the naira, offering hope to businesses and consumers alike.