In a remarkable turn of events, Nigeria’s Naira has experienced a substantial surge against the US dollar, sending ripples across various markets. The Central Bank of Nigeria’s proactive measures to address the forex backlog led to an impressive 15.18% surge in the Naira’s value.
This resurgence was particularly evident on peer-to-peer (P2P) platforms like Binance, where the exchange rate dropped below the N900 to $1 threshold, a level not seen since August 2023. This development marked a substantial increase from the N1,120 it traded for on Thursday, showcasing a rise of N170, or 15.18%, in the local currency’s value. The Naira’s strengthening trend continued for the second consecutive day following the Central Bank’s decision to reduce a portion of its foreign exchange backlog.
Data from Binance Crypto trading site revealed an impressive conversion rate of N855 to $1 by 6:30 p.m. on Friday, highlighting the Naira’s remarkable path to recovery.
Although the black market, often used as an unofficial indicator of the currency’s strength, still reflected varying conversion rates for $1 in cash transactions, ranging from N1000 to N1,100, the overall sentiment among speculators was optimistic. Many hurriedly exited their short positions, indicating a widespread expectation of further Naira appreciation.
Earlier in the week, Business Insider Africa reported a historic low in the exchange rate between Nigeria’s Naira and the US dollar on NAFEM, the official forex trading platform. The Naira experienced a substantial 20.5% devaluation, reaching its lowest level ever recorded against the dollar. This decline was starkly highlighted by the previous lowest figure of N848/$1 on October 17, 2023, representing an 8.17% devaluation in a single day.
The Naira’s recent resurgence underscores the resilience of the Nigerian economy and the effectiveness of strategic interventions by the Central Bank of Nigeria. As the currency continues its recovery, optimism pervades the market, reflecting a renewed confidence in Nigeria’s economic stability and growth prospects.