The Nigerian naira has displayed remarkable resilience against the US dollar, marking a swift turnaround in its performance. In a span of just three days, the local currency surged by N95 against the dollar at the peer-to-peer (P2P) market. The naira commenced trading at N855/$ on Friday, a considerable rebound from the unprecedented peak of N950/$ observed across P2P markets the previous week.
This impressive gain of N95/$ within such a short period is attributed to various factors, including the recent acquisition of a $3 billion loan by NNPC Limited from AfreximBank. The loan is strategically designed to enhance exchange rate stability and provide a boost to the naira’s value.
The Acting Governor of the Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi, also played a pivotal role in reinforcing the naira’s strength. Shonubi’s announcement of forthcoming measures to increase the money supply aimed at countering speculators’ efforts to devalue the naira.
During an important interaction, Shonubi communicated these initiatives to President Bola Tinubu at the State House in Abuja. He emphasized the CBN’s commitment to adopting innovative strategies to stabilize the naira against the dollar, ensuring market liquidity and steadiness. Shonubi assured Nigerians of the CBN’s dedication to addressing issues in the parallel market, noting that market fluctuations are influenced not only by economic factors but also by speculative demand.
The CBN’s observations identified illicit money transfers through improper channels and unauthorized dollar sales by commercial banks as key drivers of the naira’s depreciation. In line with its commitment to transparency and market integrity, the CBN introduced the Currency Price Verification System (FX) “PVS.” Effective August 31, 2023, the Portal Price Verification Report will be a mandatory requirement for all Form M applications.
This regulatory move reinforces the CBN’s resolve to curb forex speculation and maintain the stability of the currency market. As Nigeria strives to navigate its economic landscape, the actions taken by the central bank reflect a proactive approach aimed at bolstering the naira’s value and ensuring a resilient financial environment.
