Naira Strengthens in FX Market as CBN Intervention, Rising Reserves Lift Outlook
- The naira has made a bold comeback after several days of depreciation in the Nigerian foreign exchange market
- The development came as the Central Bank of Nigeria (CBN) intervened in the official market with forex sales to dealer banks
- Also, Nigeria’s external reserves rose to $42.696 billion, despite the fall in global crude oil prices
Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
The naira has staged a bold comeback after days of depreciation, strengthening against the US dollar in Nigeria’s official foreign exchange market.
The rebound follows renewed intervention by the Central Bank of Nigeria (CBN), which sold $70 million to authorised dealer banks to stabilise the market.
Source: Getty Images
The naira makes a stunning comeback
Despite a 33% drop in weekly forex inflows to $1.1 billion, the local currency appreciated by 0.69% to close at N1,465.29 per dollar on Monday, October 20, 2025.
Dealers quoted the greenback at a high of N1,470, a sharp recovery from Friday’s N1,482 close.
According to Coronation Merchant Bank Limited, weekly forex inflows dropped by about 33% per week to $1.1 billion
The fall in US dollar volume provides a partial reason for the exchange rate fluctuation at the official currency market last week, as analysts maintained a positive outlook rate.
Data from the Nigerian Foreign Exchange Market (NFEM) on Monday, October 20, 2025, showed that the naira appreciated by 0.69% to close at N1,465.29 per dollar.
Currency dealers priced the dollar at a high of N1,470, representing a sharp recovery relative to N1,482 per dollar on Friday, October 17, 2025.
CBN intervenes as naira falls in black market
According to a report by Market Forces Africa, the apex bank sold $70 million to authorised dealer banks as part of forex intervention to keep the US greenback supply strong and to achieve a stable exchange rate.
The local currency depreciated in the parallel segment of the foreign exchange market by 1.07% to close at N1,500 per dollar.
Reserves rise despite fall in crude prices
Nigeria’s external reserves also surged to $42.696 billion, defying weaker oil prices and global market headwinds.
Analysts expect additional inflows to lift the reserves further this week, even as global crude inventories and supply surpluses weigh on energy prices.
The International Energy Agency (IEA) has projected a growing supply surplus next year.
Reports say the US Energy Information Administration (EIA) reported a 3.5 million barrel increase in crude inventories last week to 423.8 million barrels, exceeding expectations of a 288,000 barrel build.
The inventories were primarily due to reduced refinery runs, as many plants entered maintenance cycles, leading to lower crude processing volumes.
Also, increased US-China trade tensions raised concerns about slower global growth and weaker energy demand.
US crude production rose to 13.64 million barrels per day, the highest on record, showing ample supply conditions limiting price recovery.
Experts predict stronger naira
Experts predict the naira will end the year stronger, between N1,400 and N1,450 per dollar, buoyed by easing inflation.
Source: Getty Images
The National Bureau of Statistics recently reported a drop in inflation to 18.02% in September, boosting hopes of a stable exchange rate before December.
CardinalStone Research disclosed in its macroeconomic update that it anticipates the fall in inflation to boost the Nigerian currency.
“We are expecting a strong finish for the naira on or before December,” Janet Ogochukwu, senior banker and economist, told Legit.ng on a call.
Dealers sell dollar at new rate
Legit.ng earlier reported that Nigeria’s foreign exchange market witnessed renewed pressure this week as the naira weakened further against the US dollar despite a steady rise in the country’s external reserves.
The exchange rate closed at ₦1,475.35 per dollar on Monday at the official window, with intraday rates touching as high as ₦1,482, according to data released by the Central Bank of Nigeria (CBN).
The development reflects growing dollar scarcity in the local market, even as leading financial institutions such as Access Bank, Zenith Bank, and United Bank for Africa (UBA), alongside other authorized dealers, adjusted their foreign exchange rates to reflect market realities.
Source: Legit.ng
