This development is attributed to recent increases in interest rates and the Central Bank of Nigeria's (CBN) efforts to address foreign exchange backlogs.
The IMF shared this information during a press conference held in Washington DC on Tuesday.
"In Nigeria, the combination of rate hikes and the resolution of outstanding foreign exchange obligations by the central bank has contributed to the naira's increased stability," the IMF reported.
Tobias Adrian, the IMF’s financial counselor and director of monetary and capital markets, recognized the CBN's initiatives aimed at managing inflation and stabilizing the foreign exchange market during the conference.
"The central bank is moving towards an inflation-targeting framework and has taken steps to liberalize the exchange rate, which we commend," he stated.
He added, "The rate hikes that have been implemented thus far are appropriate, particularly in light of the challenges posed by persistent inflation, which remains around 30 percent."
Despite the recent improvements in the naira's stability, the currency has faced difficulties in 2024.
On October 16, the World Bank reported that the naira continues to be one of the poorest-performing currencies in sub-Saharan Africa.
The report highlighted that the ongoing rise in demand for dollars, coupled with limited dollar inflows, has contributed to the naira's depreciation in recent months.
Nevertheless, the IMF observed that the currency has shown signs of recovery in recent months, fluctuating between N1,700 and N1,600 per dollar in the parallel market and stabilizing between N1,500 and N1,600 in official trading channels.