CPPE Explains Why Naira Is Rising Against Dollar

The Centre for Promotion of Private Enterprise, or CPPE, has revealed why the Naira has made enormous gains versus the dollar in recent weeks.

Muda Yusuf, the Director of CPPE, stated this in a statement on Sunday, December 8, as the Naira gained N127 to settle at N1,535 per dollar on Friday, December 6, up from N1,660 on Monday, December 2.

Reacting to the Naira’s surge in the FX market, CPPE ascribed it to the recent increase in Nigeria’s foreign reserves to more than $40 billion.

Furthermore, the economic think tank organization stated that the CBN’s recent implementation of the Electronic Foreign Exchange Matching System (EFEMS) has helped the Naira’s stability in the FX market.

“You can ascribe this to several issues. First, we have seen an improvement in our reserves, which reached the $40bn mark a few weeks ago, and that implies that the CBN has more power to intervene in the market, and in truth, the CBN has been intervening in the market to stabilise the currency.

“I would like to observe that in the last five months or so, we have seen relative stability in the naira exchange rate, which is a welcome development.

“Now, we are beginning to see a strengthening of the currency, so the level of our reserves has contributed to this as it elevates the confidence of foreign investors.

“Then, in the last few months, as a result of reforms in the foreign exchange market, we are seeing a consistent improvement in autonomous foreign exchange inflow in the country, especially from the international money transfer operators.”

Similar to this, several industry analysts have credited the federal government’s $2.2 billion Eurobond fundraising for the Naira’s strengthening.