Naira Gains in Official, Black Market Windows After CBN Sells $80m to FX Dealers

Naira Gains in Official, Black Market Windows After CBN Sells $80m to FX Dealers

  • The Nigerian currency, the naira, rebounded in the official and parallel markets after days of depreciation
  • The naira’s rebound comes after the Central Bank of Nigeria (CBN) injected about $80 million into the forex market to ease tension
  • The naira’s rebound follows the accretion of Nigeria's external reserves, which rose last week by over $400 million to stand at $37.842 million

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

The naira regained strength at the close of trading on Friday, July 11, 2025, following two days of depreciation in the Nigerian Foreign Exchange Market (NFEM).

The local currency appreciated to ₦1,532.34 per US dollar, gaining 77 kobo from the previous day’s ₦1,533.11 rate, according to official data from the Central Bank of Nigeria (CBN).

The naira rebounds in all markets as CBN intervenes
CBN's $80 million intervention lifts the naira in the forex market. Credit: Picture Alliance/Contributor
Source: Getty Images

CBN moves to ease liquidity crunch

This modest rebound came on the back of a fresh FX injection by the apex bank, aimed at curbing pressure from rising dollar demand.

Earlier in the week, the naira slipped from ₦1,518 to ₦1,533 as dollar demand outpaced available forex liquidity.

In response, the Central Bank intervened by selling $80 million to authorised dealer banks in a bid to bolster the dollar supply and stabilise the exchange rate.

The intervention helped ease market volatility and restored some investor confidence in the short term.

Reserves grow amid oil production uptick

Meanwhile, Nigeria’s gross external reserves rose for the second consecutive week, climbing by $422.16 million to $37.85 billion.

The boost in reserves is attributed to rising crude oil production, which hit a five-month high in June 2025.

According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), output increased by 2.4% month-on-month to 1.70 million barrels per day (mbpd), largely due to improved performance from major terminals such as Forcados, Qua Iboe, and Bonny.

Crude still below budget benchmark

Despite the production improvement, Nigeria’s average output for the first half of 2025 remains below the federal government’s target of 2.06 mbpd.

Analysts at Cordros Capital have maintained a conservative projection of 1.70 million barrels per day (mbpd) for the year, citing lingering underinvestment and sporadic disruptions to oil infrastructure.

While the improved security and renewed investment offer some optimism, structural issues continue to be a constraint on growth.

FX strategy versus debt worries

The CBN’s intervention is seen as part of a broader effort to manage forex liquidity and temper speculative attacks on the naira.

However, the dollar injection, though effective in the short term, raises questions about the sustainability of such strategies amid Nigeria’s mounting debt burden.

Recent World Bank reports show that Nigeria’s external borrowing is approaching critical levels, with repayments likely to strain federal revenues in the years ahead.

Nigerians feel the feat

While the naira’s slight rebound is welcome news, many Nigerians remain sceptical.

With inflation eroding purchasing power and energy costs soaring, citizens continue to struggle with the fallout of persistent forex instability.

“The gains are too small to matter for those of us buying goods in dollars,” said Abdulrasheed Alabi, a Lagos-based electronics importer.
“We need more than patches—we need a stable policy direction.”

Outlook remains cautiously optimistic

The CBN is expected to maintain cautious intervention while monitoring external reserve levels and oil revenue inflows.

The naira rebounds as oil prices rise to a new high
Nigeria's external reserves rise amid CBN's interventions in the Forex market. Credit: Nurphoto/Contributor
Source: Getty Images

Meanwhile, the Naira appreciated to N1,537 per dollar on Friday, July 18, 2025, in the parallel market, from N1,540 per dollar on Thursday.

Consequently, the margin between the parallel market and NFEM rate narrowed to N2 per dollar from N4 per dollar the previous day.

Analysts say the stability of the naira in the coming weeks will depend heavily on global oil prices, investor sentiment, and the federal government's effective management of its borrowing and spending.

Analysts predict new exchange rate for naira

Legit.ng earlier reported that the naira may slide to N1,700 per US dollar by the end of 2025, according to a new H2 economic outlook by Cordros Securities.

This would represent a 9.5% drop from current rates and highlights Nigeria's ongoing currency vulnerability, despite efforts by the Central Bank of Nigeria (CBN) to stabilise the market.

The Cordros report, however, acknowledges that recent FX reforms and stronger reserve buffers have mitigated more severe devaluation.

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Source: Legit.ng

Authors:
Pascal Oparada avatar

Pascal Oparada (Business editor) For over a decade, Pascal Oparada has reported on tech, energy, stocks, investment, and the economy. He has worked in many media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner. Email:pascal.oparada@corp.legit.ng