FX Market Tension Rises: Naira Slips to N1,585/$ Despite CBN’s Intervention

• Naira Depreciates: The naira has fallen to N1,585/$ at the parallel market, with a gap of over N40/$ from the official rate of N1,538/$, raising concerns about market arbitrage.
• CBN’s Commitment: CBN Governor Yemi Cardoso reassures the bank’s commitment to stabilizing the FX market and highlights growing investor confidence from visits by JP Morgan, Citi Bank, and the IMF.
• Harvard Delegation Visit: The Harvard Kennedy School (HKS) Africa Trek delegation, comprising 50 students from 19 countries, visited the CBN to discuss economic development and policy solutions.

The recent rally of the naira since the beginning of the year appears to have slowed down as the domestic currency approaches N1,600/$ at the parallel market.

Over the past few days, the naira has traded between N1,550 and N1,590, settling around N1,585/$ in the parallel market.

At the official Nigerian Foreign Exchange Market (NFEM), it trades approximately at N1,538/$, creating a difference of over N40/$ between the official and unofficial rates. This growing gap has raised concerns about market arbitrage.

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Despite these developments, the Central Bank of Nigeria (CBN) has reaffirmed its commitment to maintaining stability in the foreign exchange (FX) market.

During a meeting with a delegation from the Harvard Kennedy School (HKS) Africa Trek, which included visits to Ghana and Nigeria, CBN Governor Yemi Cardoso acknowledged the economic challenges facing Nigeria but highlighted progress in stabilizing the market and addressing inflation.

Cardoso pointed to recent visits by top executives from JP Morgan, Citi Bank, and the International Monetary Fund (IMF) as signs of increasing investor confidence in Nigeria’s economy.

“These are individuals who base their decisions on data and trends, not sentiment. Their interest reaffirms that we are on the right path,” he stated.

He further emphasized the CBN’s dedication to fostering intellectual engagement and promoting policy-driven solutions.

The visit by the Harvard delegation brought together 50 students from 19 countries, including representatives from the Harvard Business School, Massachusetts Institute of Technology (MIT), and Stanford University.

As an alumnus of HKS and the first African elected to the global HKS Alumni Board of Directors, Cardoso underscored the importance of exchanging ideas and forming partnerships to build trust and understanding.

“As we reset the bank, we are committed to being a hub for thought leadership. The exposure you gain from institutions like Harvard is invaluable, and we see this as an opportunity to build long-term alliances,” he remarked.

The president of the Harvard Kennedy School Alumni Association of Nigeria (HKSAAN), Adaora Ndukwe, and the HKS Nigeria Trek Delegation Lead, Sheffy Kolade, expressed gratitude to the CBN for hosting the delegation.

They praised the bank’s commitment to engaging with future policymakers and offering valuable insights into Nigeria’s evolving economic landscape.

The Africa Trek initiative facilitates direct engagement between emerging global leaders and key policymakers across Africa.

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Through discussions with influential figures, it offers a platform to explore governance, innovation, economic development, financial stability, and the role of central banking in national progress.

This visit marked the first time the Africa Trek delegation has engaged with the CBN.

 

 

 

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