CBN Sells Dollars to Access, UBA, Other Dealers to Propel Naira to 4-Month High in FX Market

• The Nigerian currency recorded a massive comeback against the dollar in the official foreign exchange market on Monday, July 14, 2025
• This is because the Central Bank of Nigeria (CBN) injected more FX into the market to improve liquidity
• The apex bank’s intervention contributed to a more stable exchange rate environment, even as inflows declined significantly

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Nigeria’s local currency, the naira, recorded a major gain against the US dollar, closing at N1,518.88 at the official market as of Monday, July 15, 2025.

This followed a targeted foreign exchange (FX) intervention by the Central Bank of Nigeria (CBN), aimed at improving market liquidity and easing pressure on the naira.

CBN injects $50 million into FX market

According to spot FX data from the CBN, the naira’s strength came on the heels of $50 million in sales to authorised dealers during the previous week.

The move became necessary as corporate demand for dollars surged, outstripping available supply on Thursday and Friday.

The action helped alleviate the liquidity strain that had defined the market in the past week.

The apex bank’s intervention contributed to a more stable exchange rate environment, even as inflows declined significantly.

A market report by Coronation Research, the analytical arm of Coronation Merchant Bank, revealed that total FX inflows into the official window dipped to $749.8 million, a 57% drop from the previous week’s $1.76 billion.

Analysts noted that this drop underscores the continued need for the CBN’s involvement to maintain equilibrium in the forex market.

External reserves rise

In support of its currency defense strategy, the CBN’s data showed that Nigeria’s external reserves rose to $37.432 billion, marking a modest recovery after weeks of decline.

In the first half of 2025, the CBN had already deployed $4.75 billion in FX sales to stabilise the market, a move that helped bring the official and parallel market rates closer.

Meanwhile, the price of oil, Nigeria’s main foreign exchange earner, also saw a slight recovery last week.

Crude oil prices rise

Brent crude closed at $70.36 per barrel, up from $68.30, reflecting a 3.02% weekly gain. Bonny Light, Nigeria’s premium grade, rose to $72.81 per barrel, maintaining a $2.45 premium over Brent.

Coronation Research analysts said geopolitical tensions, particularly drone attacks in the Middle East and fresh US sanctions on Russia, helped support oil prices.

Additionally, a larger-than-expected drawdown in US crude inventories and hopes of economic stimulus from China helped improve global demand sentiment.

OPEC increases output

Despite these bullish signals, analysts cautioned that non-OPEC supply increases and weak global demand could cap long-term gains in oil prices.

For Nigeria, a stable oil price and rising external reserves provide much-needed support for naira stability.

However, analysts warn that any pause in CBN’s intervention could reopen the volatility seen earlier in the year.

Looking forward, sustained FX liquidity, ongoing support from oil revenues, and tighter fiscal discipline are expected to remain crucial if Nigeria is to keep the naira on a stable path.

Stakeholders continue to urge the CBN to maintain transparent and market-driven policies to support the currency’s long-term strength.

Naira ends 2-week winning streak

Legit.ng earlier reported that the naira faced renewed pressure in the foreign exchange market on Tuesday, July 8, 2025, as demand outstripped supply for the first time in two weeks.

The Central Bank of Nigeria (CBN) quoted the official dollar rate at N1,529.22 per dollar, representing a slight depreciation from N1,528.33 the previous day.

Data from the Nigerian Foreign Exchange Market (NFEM) shows that currency dealers quoted the dollar at a high of N1,532.50 per dollar and a low of N1,527.

Proofreading by Funmilayo Aremu, copy editor at Legit.ng.

Source: Legit.ng