The Naira experienced an appreciation against the Dollar, gaining 0.44% due to CBN reforms aimed at market transparency. Analysts praise this stability, but experts urge caution, emphasizing the need for increased economic production to sustain these gains. Foreign exchange reserves are declining, yet market liquidity appears strong.
The Naira strengthened in the official market, trading at N1,492.49 to the Dollar on Friday, indicating a gain of N6.57 or 0.44 percent from the previous day’s close of N1,499.07. This stability follows recent reforms by the Central Bank of Nigeria (CBN) aimed at enhancing transparency in the Foreign Exchange market. Since December 2024, there has been a notable steady progress in the currency’s performance, which has garnered positive feedback from analysts.
Despite this improvement, Prof. Jonathan Aremu, a former CBN Director, cautioned against premature celebrations. He highlighted the necessity for increased production to sustain these gains over time. He emphasized that the current appreciation, while positive, is not guaranteed without ongoing support for economic production levels.
The recent appreciation of the Naira reflects the impact of CBN reforms focused on transparency in the forex market. However, experts like Prof. Aremu underscore the importance of bolstering production to ensure lasting currency stability. Continuous enhancements in economic activity, rather than solely monetary policy adjustments, are crucial for sustaining these gains and enhancing the overall economic outlook.
Original Source: nannews.ng
