The Nigerian Naira on Monday experienced a slight appreciation against the US dollar, following a 4 kobo gain – from N159.93 to a dollar as against N159.97 – recorded in the country’s interbank market.
The Central Bank of Nigeria’s (CBN) intervention at the Retail Dutch Auction System (RDAS) window – in which it offered $300 million to 20 commercial banks for a price of N155.90 to a dollar – has been credited for the firmness of the currency.
In recent times, the Naira has maintained a stable international market valuation despite the global financial crisis that threatened to cripple emerging markets and cheapen legal tenders worldwide.
“If you look at all emerging markets’ currencies, starting December till now, the Indian rupee, Brazilian riel, the Ghanaian Cedi, the South African Rand you find that most of them have lost between 10 or 20 per cent of their value,” said Lamido Sanusi Lamido, Nigeria’s CBN Governor.
“The naira lost a maximum 2.3 percent and it is actually back to being within the range. So it has been stable and we have done that without losing too much in terms of reserves” he said.
According to him, prudent economic spending and stricter lending policies have protected the currency for external financial shocks.
“We have had to tighten money, increase cash reserve requirement, increase the rate at which banks lend to each other and lend to customers. But that is the price you pay for stability. So even when we had the pressure on the naira, the pressure was not coming as a result of a major reversal in capital inflows.”
Analysts have also predicted that the re-opening of the Trans Niger crude oil pipeline by Shell Petroleum Development Company of Nigeria Limited (SPDC) will further aid the stabilization of the Naira.
