Recent fluctuations in the naira’s value reflect the Central Bank of Nigeria’s actions to stabilize the currency. The forex market saw reduced interventions from the CBN due to declining external reserves, which stood at $39.09bn. The naira strengthened at the parallel market to 1,552/$, attributed to increased investor confidence. However, official forex markets faced ongoing demand pressure.
The naira depreciated by 0.54% week-on-week to 1509.70/$, according to the Meristem weekly report. The President of the Association of Bureau De Change Operators expressed optimism about the naira’s positive performance, citing factors like increased liquidity, reduced demand, and improved investor confidence.
Analysts project a relatively stable naira in the coming week, barring significant market disruptions. The recent naira appreciation is linked to the clearance of a $7bn forex backlog and improved market liquidity.
The Governor of the Central Bank of Nigeria announced the successful clearance of the $7bn forex backlog, aiming to ease fund repatriation challenges for businesses and foreign investors.
Comercio Partners predicts a potential drop in the naira to 1,700/$ by mid-year due to the country’s reliance on oil imports. The report suggests that structural economic reforms are necessary for sustained currency stability and broader economic resilience in the future.