The appreciation of Nigeria's currency, the naira, continued in both the official and parallel markets on Monday following a significant 12 percent or N152.23 reduction in the Bureaux de Change (BDC) exchange rate to N1,117.5 per dollar.

In recent weeks, the naira has been steadily appreciating against the dollar, attributed to intensified efforts by the federal government to boost the economy.

One of the key factors contributing to the naira's appreciation is the Central Bank of Nigeria's (CBN) decision to sell dollars to Bureau de Change (BDC) operators. In a recent circular, the CBN announced the sale of $10,000 to each BDC at a rate of about N1101 per dollar and instructed them to sell at a spread not exceeding 1.5 percent above the CBN rate. This strategy aims to strengthen the naira against the dollar, leading to an exchange rate of N1,117.5 per dollar. Customers are now holding off on purchasing dollars in anticipation of further reductions based on the CBN's announcement.

Additionally, the implementation of CBN policies under the leadership of Dr. Olayemi Cardoso has played a significant role in the naira's steady appreciation. Nnamdi Nwizu, co-founder of Comercio Partners Limited, an investment bank, affirmed that CBN policies have bolstered confidence in the market and contributed to the currency's appreciation. Factors such as increased Foreign Portfolio Investment (FPI) interest in Nigeria, clearance of forex backlogs by the CBN, and high-interest rates making it challenging to source naira for purchasing dollars have all contributed to the naira's strength.

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