Positive Indicators for Naira Recovery

Aside positive developments in the global economy, the CBN has taken action to address the risks facing the naira, which will lead to rapid recovery for the local currency.

For instance, the recovery in the Chinese manufacturing sector and opening of the Asian tiger’s economy after months of closure due to the coronavirus pandemic have raised the country’s crude oil demand, many of which will be bought from Nigeria. Such purchases will boost Nigeria’s dollar earnings.

Besides, Nigeria is one of the few lucky countries that have secured emergency $3.4 billion loan from the International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI). This fund will not only support Nigeria’s financial sector and address balance of payment hitches, but has boosted foreign reserves and financing to the budget for targeted and temporary spending increases.

Nigeria’s foreign reserves have reached over $37 billion, which represents enough buffers for the CBN  to deal with any act of illegal economic behaviour like hoarding, speculation, conversion of local assets among other illicit financial activities. 

Gwadabe also added that the OPEC measures on sustainable price stability are commendable as many governments across the world  have agreed to oil production adjustment targets and continued collaboration   with all their partners, a move that will benefit Nigeria.