“Expect Further Rise”: Experts Predict New Exchange Rate as Naira Gains N300
- The Nigerian currency, the naira, has witnessed rapid gains in the foreign exchange markets in recent weeks
- Data from the FX markets showed that the naira has gained over N300 in the last three weeks
- The development is mainly due to the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by CBN
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency, the naira, has appreciated steadily since the Eurobond sales and the Central Bank of Nigeria's (CBN) introduction of the Electronic Matching System on Monday, December 2, 2024.
Data from the CBN showed the naira appreciated N1,533 from N1,570 on Friday, December 6, 2024.
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Naira gains N300 against dollar in three weeks
The naira has gained more than N300 since the second week of November 2024, when it hit an all-time low of N1,689 per dollar.
Experts have projected the naira to keep rallying until January 2025 and said the gains were due to the FX market's transparency, which the introduction of the EFEMS has boosted.
The new FX trading platform helps tackle speculations and improve transparency in Nigeria’s FX market.
Functions of the EFEMS
It automatically matches buy and sell orders and promotes fairness and efficiency in forex trading.
Analysts have expressed hope about the EFEMS’ potential to curtail persistent challenges affecting the naira and Nigeria’s FX reserves.
The new platform allows authorised dealers, including banks, to place buy and sell orders in real-time. Transactions are automatically matched based on predetermined rules to ensure rapid execution and real-time visibility for participants and regulators.
Experts predict new rates for the naira
Experts have lauded the CBN’s initiative, saying the naira is now finding its value via the new platform.
Senior banker and economist, Janet Ogochukwu, disclosed that the new platform enabled the naira to perform well against major currencies, defying the dire predictions against it.
“I think the new system has been seen as transformative in shaping the true value of the naira. Now, we are seeing the true rates in which the local currency can trade,” she said.
According to her, the move has defied naysayers who predicted the worst for the naira. She said that if the move is sustained, the naira could revert to N1,300 by January 2025.
CBN crashes dollar for importers
Legit.ng previously reported that the CBN had crashed the dollar for Nigerian importers as the value of the naira rose.
The apex bank reduced the Customs exchange rate for cargo clearance from N1,588 to N1,533 per dollar as of December 7, 2024.
The financial development meant that importers opening Form M would pay N55 less to clear their cargo from Nigeria's ports.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
Source: Legit.ng
