The naira appreciated further on Thursday, rising to N1,493 per dollar in the official foreign exchange market, according to data from the Central Bank of Nigeria (CBN).
This marks a ₦13 gain from the N1,506 per dollar recorded on Wednesday. The local currency had previously touched the N1,400 per dollar mark earlier in January and May 2024.
Parallel Market Also Sees Gains
In the parallel market, the naira strengthened to N1,620 per dollar, improving from N1,630 per dollar the previous day. However, the gap between the official and parallel market rates widened to N127 per dollar, up from N124 per dollar on Wednesday.
What’s Driving the Naira’s Appreciation?
The naira’s recent gains come in the wake of the CBN’s Foreign Exchange Code, launched earlier this week to improve transparency and efficiency in the FX market. The policy aims to stabilize the currency by promoting market discipline and reducing speculative activities.
Despite the gains, analysts note that sustained improvement will depend on factors such as:
- Increased foreign exchange inflows
- Stability in CBN interventions
- Market confidence in monetary policies
Outlook for the Naira
While the naira continues its upward trajectory, economic observers are watching whether the CBN’s forex reforms will create long-term stability or if short-term fluctuations will persist.