Recently, the Nigerian naira saw an increase in value compared to the US dollar thanks to some moves by the Central Bank of Nigeria (CBN). The exchange rate fell to 1,410 last week from a YTD high of 1,628.

The CBN is set to announce its decision on interest rates after a meeting this week. Experts anticipate a 400 basis point hike in rates to help the currency and control inflation, which is higher than the CBN's target. Analysts are predicting a significant rate increase to combat the rising inflation levels.

The CBN has implemented various strategies to stabilize the naira, including cracking down on the operations of Binance, the leading crypto exchange, for tax evasion and illegal transactions. Additionally, the central bank has successfully cleared a foreign exchange backlog of over $7 billion, previously hindering certain companies' operations in Nigeria.

The stability of the naira is further supported by the increase in remittances to Nigeria, reaching $1.3 billion in February alone. Foreign investors have also injected over $1 billion into Nigeria, contributing to a total of $2.3 billion in inflows. Many believe these positive indicators could lead to short-term gains for the naira and a downward trend in inflation.

Looking ahead, economists are hopeful that policies introduced by the government could lead to a stronger naira in the future. Initiatives like ending petroleum subsidies and reducing regulations to attract more companies are expected to bring stability. With some African currencies showing growth recently and the Nigerian naira potentially undervalued, there is optimism for the currency's future strength.