By Our Reporter
Naira continues to appreciate against the dollar exchanging at N1,450/$, from N1, 500/$ in the previous week. Experts have attributed this rise in the value of the naira to the Central Bank’s active participation in the Forex market resulting in a steady stream of foreign portfolio inflow into the debt market as well as steady oil receipts that has substantially alleviated cashflow crisis. Additionally, the presence of a more peaceful operating environment devoid of any negative global risk sentiment, has contributed immensely to a more robust naira.
Also, the CBN through a tighter monitoring mechanism has managed to keep the differences in exchange rates between the official windows and the parallel market at a minimum of not more than N15 to N25. While the official rate of the naira to the dollar at the Nigerian Foreign Exchange Market, NFEM, hovered between N1, 441 – N1, 444 to dollar, the parallel market sold at N1, 450 and N1, 460 to a dollar.
With the CBN commitment to improving dollar supply, with increased dollar inflow from oil revenue, economists are of the view that the fundamentals are strong, given rising Gross Domestic Product, GDP, especially as Nigeria continues to benefit from higher crude oil prices and higher oil exportation.
Analysts posit that if this trend persists, it will have positive effect on the general price level. Already consumers are beginning to enjoy drop in the prices of some commodities as well as food stuffs. This, experts say will likely reduce inflationary pressures as general price level continues to fall.