CBN Governor Happy as Naira Appreciates Against US Dollar in All Forex Markets

• The Central Bank of Nigeria has expressed confidence on its reforms in the foreign exchange markets
• The apex bank noted that the reforms has helped stabilised the naira exchange rate and restored investor confidence
• The value of the naira improved against the US dollar in all foreign exchange markets after the CBN's MPC meeting

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Olayemi Cardoso the governor of the Central Bank of Nigeria has revealed that the sustained fiscal and monetary reforms has helped stabilise the naira and restore investor confidence.

Speaking after the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, May 20, Cardoso noted that the Nigerian economy and the naira is now position on a more competitive footing.

He also said that the recent improvements in Nigeria’s exchange rate dynamics, inflation outlook, and external reserves were direct results of decisive policy shifts introduced since June 2023.

Cardoso words:

"The Fitch upgrade, which came during a period of significant global economic headwinds, makes it even more meaningful."

He stated this while referring to Fitch Ratings’ recent revision of Nigeria’s long-term credit rating from ‘B-’ to ‘B’ with a stable outlook.

He added:

“It is a very positive signal, especially when you consider the uncertainty around global trade, interest rates, and capital flows.”

Cardoso attributed the gains to reforms including exchange rate liberalisation, tighter monetary policy, the end of deficit monetisation, and the removal of petrol subsidies, changes that helped Nigeria weather global market volatility better than many peer economies.

He said.

“We are in a period of heightened global tension, and currencies around the world have been under attack.

“But Nigeria came out well engaged. Our depreciation was modest, and our reforms allowed us to build buffers that absorbed the shocks.”

Naira now stable

Cardoso credited the CBN’s forward-looking strategy for averting worse outcomes, explaining that the exchange rate volatility has declined from over 4% a year ago to below 0.5%.

He said:

“If those actions had not been taken when they were, the results would have been far more damaging."

The governor further pointed to a significant jump in net external reserves from just over $3 billion to about $23 billion as evidence of improved market confidence, BusinessDay reports.

He also pointed to a surplus in the current account, improved trade balance

The CBN governor added:

“These figures didn’t just happen. They reflect transparency in process, policy consistency, and reforms that encouraged players who had been sitting on the sidelines to return to the market.”

Naira appreciates in official, black markets

Latest data from the CBN showed that on Tuesday the value of the naira improved against the dollar in the official market to N1,597/$ from previous rate of N1,599/$.

In the black market traders confirmed that the dollar exchange rate dropped.

Abudulahhi said:

"On Tuesday our buying rate for the dollar dropped from N1,613 to 1610. While selling rate is now at N1,622 from previous rate of N1,635."

Customs exchange rate

Earlier, Legit.ng reported that the CBN has announced the latest customs exchange rate to reflect the naira’s recent performance in the forex markets.

The latest exchange rate will be used by importers to clear goods at Nigerian ports and also at airports

The naira in the Nigerian Foreign Exchange Market in recent days has appreciated against the US dollar.

Source: Legit.ng