Naira posts another weekly gain as Nigeria's currency woes ease
TLDR
- Nigeria's currency, the naira, saw its fourth consecutive week of gains, reaching its strongest level against the dollar since being devalued in January.
- Central Bank Governor Olayemi Cardoso implemented key policy moves contributing to the naira's rally, closing at ₦1,251.05 per dollar on Friday.
- Aggressive strategies by the apex bank, such as raising the benchmark interest rate and addressing foreign exchange issues, have led to increased stability in the currency market.
Nigeria’s battered currency continued to advance last week - its fourth consecutive week of gains this year - and reached its strongest level against the dollar since being devalued in January.
The naira rallied last week on the official market to close at ₦1,251.05 per dollar on Friday, the latest date for which pricing is available, as investors welcomed a series of policy moves implemented by Central Bank Governor Olayemi Cardoso.
The apex bank in March raised the benchmark interest rate by a total of 600 basis points to 24.75% across two meetings in response to the country’s rapidly rising inflation. Its overall aggressive strategy, which also includes paying off all foreign exchange backlogs and cracking down on the unofficial market and virtual service providers, has brought about some stability.
Key Takeaways
Despite predictions forecasting further depreciation of the naira, the currency has shown resilience, defying these expectations. The EIU for instance had anticipated the Nigerian naira to stabilize at around N2,000 per US dollar in the current year. However, prevailing market fundamentals and price trends suggest otherwise. The naira is encountering notable resistance, particularly as the US dollar strengthens amidst robust economic data from the United States. Despite the CBN's hawkish stance, the naira continues to hover close to a critical support level of N1200/$, indicating the challenges it faces in maintaining its value.
Think someone else should see this?
To invest in this opportunity and other opportunities across Africa
Download the daba finance app on your mobile through
Take action.
Download app
Start investing in Africa’s best opportunities, including stocks, bonds, startups, venture funds, and more.
Partner with us
Unlock exciting business opportunities and growth potential.
Join Daba
Become a part of our vibrant community and enjoy exclusive benefits.
Contact us
Reach out to us for inquiries, support, or collaboration.