Naira gains N5.75 to close at N1,358.25/$ as reserves climb to $52.26bn

The naira appreciated by N5.75 against the dollar, closing the weekend at N1,358.25 per dollar at the Nigerian Foreign Exchange Market (NFEM). Central Bank of Nigeria (CBN) data also put the country's external reserves at $52.26 billion, up from $52.06 billion.

Reserves and market activity

The reserves position can cover 10 months of import for the economy, according to the CBN. The increase adds further support to Nigeria's foreign exchange position.

The local currency had closed the previous week at N1,364 per dollar, an appreciation of 0.42 per cent. During the week, the naira initially weakened to N1,365 per dollar on Tuesday before strengthening over the final three trading sessions.

CBN trading data showed 137 interbank deals were recorded on Friday, with interbank turnover of $119.59 million. Foreign exchange turnover remained volatile during the week, falling sharply before recovering in subsequent sessions.

Cardoso: reforms have made forex market transparent

CBN Governor Olayemi Cardoso said the apex bank's policies over the last three years have significantly improved Nigeria's foreign exchange market, moving it from opacity to a transparent market with a unified exchange rate.

“This has eliminated the need for Nigerians to scramble for foreign exchange and has made it easier for businesses to access foreign currency. The reforms have also improved the international perception of Nigeria's currency, as naira cards now work abroad,” he stated.

Diaspora remittances heading to $1bn monthly

Cardoso said the reforms and rising confidence in the economy pushed diaspora remittances to $600 million plus monthly. He added that remittances are expected to hit $1 billion monthly by year end.

“We are expecting that by the end of the year, the diaspora remittances will hit about $1 billion a month from diaspora businesses,” he said.

He also said robust liquidity in the forex market has motivated foreign investors to take investment decisions that favour Nigeria because of the free entry and exit policy.

For Nigerian businesses and households, the stronger reserves and steady naira performance suggest continued improvement in dollar supply, making access to foreign currency less stressful than in past years.