Naira Appreciates: Dealers Sell Pound, Euro, Canadian Dollars at New Exchange Rate

• The value of Nigerian currency has improved since the CBN introduced the EFEM to stabilise the market
• Checks show that aside from the US dollar the naira has also appreciated against the British pound sterling and also the euro
• Bismark Rewane said the performance of the naira in the foreign exchange market is temporarily

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Since the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN), the Nigerian naira has improved against major foreign currencies.

EFEM was introduced on November 26, 2024, to enhance transparency and operational efficiency in Nigeria’s forex market.

The impact of EFEMS in stabilising and boosting the naira's value is seen across various currency pairs.

For instance, the naira strengthened by N209.01 against the pound sterling, marking an 11.02% increase.

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BusinessDay reports that as of February 21, 2025, the pound was quoted at N1,896.62 compared to N2,105.63 recorded on December 2, 2024, when EFEMS operations commenced.

Similarly, at the parallel market, the naira appreciated N1,920 against the pound sterling by February 21, 2025, from an average rate of N2238 exchange rate in December 2024.

Naira against the euro

It is a similar scenario for the naira against the euro as it gained N176.67 or 11.3%, as traders sell at N1,569.16 naira per euro on February 21, 2025, up from N1,745.83 quoted on December 2, 2024.

In the black market, the euro to the naira exchange rate is now exchanged at N1,560.

Additionally, the naira strengthened against the Canadian dollar, with the black market exchange rate reported at N1,100 per Canadian dollar on February 21, 2025.

MPC highlights EFEM's impact

The CBN's Monetary Policy Committee (MPC) in its last meeting spoke on how the EFEM has ensured stability in the FX market.

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Similarly, Governor Olayemi Cardoso also emphasised the benefits of these improvements, including enhanced exchange rate stability and convergence between different FX markets.

Another key decision of the CBN that has helped the naira is the B-Match system and the Nigeria Foreign Exchange Code in promoting market transparency, ethics, and credibility.

Economist expert, Kelvin Emmanuel also gave insight on why the naira is appreciating.

He said:

"The introduction of the Bloomberg B-Matching system at the NFEM and the migration from a managed float have led to primary dealers gradually complying with the policy directive from Trade and Exchange to hold 0% long onshore and 20% short onshore, strengthening liquidity and transparency in the markets."

US dollar crashes again

Legit.ng reported the latest movement in the naira exchange rate indicated that the gap between the official and black markets has converged.

In the Nigerian Autonomous Foreign Exchange Market (NAFEX), the official market closed against the US dollar at N1,500.65.

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With the black market exchange rate now at N1,505/$, the gap between the official and black markets is now N30.

Source: Legit.ng