On April 12, 2024, the Naira closed at N1,142/$, supported by frequent interest rate hikes and capital inflows.
The Goldman Sachs Group has recently noted that the Naira has established itself as the world’s best-performing currency in April, with expectations of extending its reign despite ongoing policy management challenges by the Central Bank of Nigeria (CBN).
According to Bloomberg, in April alone, the Naira gained 12% against the dollar, building on a 14% surge in March. Economists from Goldman Sachs had earlier predicted the Naira would strengthen to N1,200/$ in 2024; now, they suggest it could surpass that level due to the CBN’s policies, including a total of 600 basis points in interest rate hikes.
Recent observations across parallel and non-parallel foreign exchange markets affirm Goldman Sachs’ predictions about the Naira’s performance.
Let’s review recent Naira performance:
Notably, the Naira has performed well against the dollar, reaching significant highs in recent trading sessions.
At the Nigerian Autonomous Foreign Exchange (NAFEM) window, the Naira closed at N1,142.38 per dollar on Friday, compared to N1,230.61 per dollar on Monday, marking an impressive appreciation of N88.23 within days.
The Naira continued to appreciate in the parallel market, closing at N1,150 per dollar on Friday, compared to N1,240 per dollar on Monday, marking a remarkable appreciation of N90 in just a few days despite the national holiday.
The daily turnover on the official FX window increased by 124.71%, reaching $281.34 million on Friday, compared to $125.55 million on Monday, with the highest spot rate observed on Friday standing at N1,265 and the lowest at N1,100.
Under the new leadership of Governor Olayemi Cardoso, the CBN has implemented several policies, including a ban on the use of foreign currency-denominated collateral for accessing Naira loans, a move welcomed by the Association of Bureaux De Change Operators of Nigeria (ABCON). This policy is expected to enrich dollar liquidity, bolster reserves, and fortify the monetary services sector, with exceptions for Federal Government-issued Eurobonds or guarantees provided by foreign banks, including Standby Letters of Credit.
Despite criticisms of the policies shaping the country’s foreign exchange market, President Bola Tinubu’s bold leadership and decisive monetary reforms have spurred the current economic resurgence, with the Naira emerging as the world’s best-performing currency. These reforms have laid a strong foundation for sustainable growth, providing businesses with much-needed stability.
As a financial organization in the cross-border industry, we are proud to be part of the Nigerian business ecosystem experiencing these reforms. We reaffirm our commitment to excellent service. As the Naira continues to appreciate against the dollar, we will work tirelessly to ensure all your currency needs are swiftly met and securely processed through our KYC process.
Simply contact us today at Bluebulb Financials or call 0913 103 7978 to get started on exchange needs.
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