Nigeria Nigerian Naira Shows Resilience, Rises to N1,120 Against Dollar in Par

The Nigerian Naira exhibited a remarkable appreciation against the United States Dollar on Monday, with significant gains observed in both the parallel market and the official foreign exchange (FX) window.

This currency shift has drawn attention from investors, economists, and policymakers, prompting discussions about its implications for the Nigerian economy.

At the parallel section of the FX market, the Naira surged to N1,120 per dollar, marking a notable decrease of 9.67 percent from the N1,240/$ rate reported just days earlier on April 3. Bureau de change (BDC) operators in Lagos quoted buying rates of N1,100 and selling rates of N1,120, signaling a profit margin of N20.

Simultaneously, at the official window overseen by the FMDQ Exchange, the Naira appreciated by 1.63 percent to N1,230.61/$ on Monday, up from N1,251.05/$ recorded on April 5.

This positive trend reflects renewed confidence in the local currency and suggests improvements in Nigeria's foreign exchange management.

The gap between the parallel market and the official window rates narrowed to N110.61, indicating increased convergence between the two exchange markets. This convergence is a positive development that fosters transparency and stability in the foreign exchange market.

Goldman Sachs, a prominent financial institution, had previously forecasted that the Naira would appreciate to N1,200 against the dollar within the next 12 months.

This prediction underscores growing optimism about Nigeria's economic prospects and suggests that the Naira may be undervalued, paving the way for further appreciation.

The recent appreciation of the Naira comes amidst the Central Bank of Nigeria's (CBN) interventions in the foreign exchange market.

In February, the CBN sold $20,000 to each BDC at a rate of N1,301/$, followed by a reduction to $10,000 per BDC at N1,251/$ in March.

The CBN's decision to further reduce the selling rate to N1,101/$ on Monday reflects ongoing efforts to stabilize the Naira and support economic recovery.

Overall, the strengthening of the Naira against the Dollar signals positive developments for Nigeria's economy, bolstering confidence among investors and stakeholders while providing a glimmer of hope for sustained growth and stability in the foreign exchange market.