A member of the Monetary Policy Committee of the Central Bank of Nigeria (CBN), Aloysius Uche Ordu, has linked the gains made by the naira to the stability in crude oil prices and high revenues from oil.
In November 2024, the naira, which traded at almost N1,900 per dollar, recovered to about N1600 at the parallel market.
Since January, the spread between the official Nigerian autonomous foreign exchange market and the parallel market has reduced to less than one per cent.
As of the close of market at the unofficial market, the naira closed at N1,560 per dollar on Wednesday, sustaining earlier gains made by the currency.
Ordu, who shared his view in his statement at the 299th MPC meeting chaired by the CBN Governor, Olayemi Cardoso, linked the development to stability in crude oil prices.
The Nigerian government relies on oil revenues for over 90 per cent of foreign exchange earnings.
As of December last year, oil production rose to about 1.5 million barrels per day.
In January 2025, oil production rose to 1.75 mbpd, signalling more foreign exchange earnings for the government.
The MPC member said the naira appreciated by 13.6 per cent against the dollar between November 2024 and January 2025, reflecting improved foreign exchange inflows and effective monetary policies.
He said, “This appreciation is attributed to higher oil revenue, increased remittances, and foreign investment inflows, as well as enhanced exchange rate management by CBN.
“The foreign exchange market has stabilised, providing greater confidence for businesses and consumers, reducing import costs, and supporting domestic price stability.”
According to him, external reserves held by the apex bank have remained robust and supported exchange rate stability.
He also said that CBN’s continued efforts to increase reserves through non-oil exports, diaspora remittances, and foreign investment inflows have contributed to this positive trend.
Ordu said, “As a result, the economy is better positioned to withstand external shocks, ensuring a more resilient financial environment for businesses and consumers.
“The ongoing tariff escalation between the U.S., China, and other major economies has introduced greater volatility in global commodity markets, affecting Nigeria’s trade balance.
“However, stabilising oil prices and increasing global demand for Nigerian crude have helped sustain foreign exchange inflows and support economic growth projections for 2025.”
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