Real reason Naira is appreciating massively against dollar – CPPE

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The Naira has seen significant gains against the dollar in recent weeks, according to the Centre for Promotion of Private Enterprise (CPPE), as a result of the Central Bank of Nigeria’s interventions and increases in the nation’s foreign reserves.

This was revealed in a statement on Sunday by Muda Yusuf, the Director of CPPE.

In contrast to previous Monday, when it closed at N1,660 against the dollar, the Naira gained N127 to settle at N1,535 last Friday.

In response to the notable increase in the value of the Naira on the foreign exchange market, CPPE said it was due to Nigeria’s external reserves increasing to more than $40 billion in recent days.

Furthermore, according to the economic think tank organisation, the stability of the Naira in the foreign exchange market has been aided by the CBN’s recent implementation of the Electronic Foreign Exchange Matching System (EFEMS).

“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.”

In a similar vein, several industry analysts have credited the recent success of the federal government in raising $2.2 billion through Eurobond on the global market for the strengthening of the Naira.

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