CBN’s $250 Million Intervention Lifts Naira in the Forex Market, FX Rate Gap Narrows
- The Nigerian currency rebounded in the foreign exchange market after the CBN took a serious step to stabilise the market
- Experts have said that the CBN’s injection created an atmosphere for the local currency’s rebound
- Despite the pressure caused by the excessive demand for the US dollar, the naira has remained relatively resilient
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The naira staged a modest but confidence-boosting rebound on Monday after the Central Bank of Nigeria (CBN) injected $250 million into the foreign exchange market, shoring up dollar liquidity amid a noticeable slowdown in FX inflows.
The intervention came at a critical moment, following a 15% week-on-week drop in foreign exchange supply that had weighed on market sentiment and pushed the currency lower in recent sessions.
Source: Getty Images
Naira gains at official and parallel markets
Data showed that FX market liquidity weakened last week, costing the naira about ₦3 per dollar in transactions as inflows from key sources thinned.
In response, the CBN sold $250 million cumulatively to authorised dealer banks at the official window, providing much-needed support as supply from foreign portfolio investors, exporters, and non-bank corporates slowed.
The carryover effect of the intervention was evident in Monday’s trading. At the Nigerian Foreign Exchange Market official window, the naira appreciated by 0.18% to close at ₦1,451.82 per dollar.
During the session, the spot rate touched an intraday high of ₦1,455, improving from the previous session’s ₦1,458.50, while easing pressures allowed the currency to firm to an intraday low of ₦1,450.
Positive momentum also filtered into the parallel market, where the naira strengthened to ₦1,477 per dollar.
The improvement across both the regulated and informal segments reflected renewed confidence among market participants and reduced speculative pressure.
Weekly performance shows narrowing FX gap
Despite Monday’s gains, sentiment around the naira had been mixed in the prior week.
The official rate depreciated slightly by 0.28% week-on-week, closing at ₦1,454.41 per dollar compared with ₦1,450.42 previously. In contrast, the parallel market appreciated to ₦1,485 from ₦1,495 per dollar.
As a result, the spread between the official and parallel markets narrowed sharply to ₦30.59 per dollar from ₦44.57 a week earlier, according to a report by the research subsidiary of Coronation Merchant Bank Limited.
The tightening gap is seen as a positive signal for price discovery and FX market convergence.
FX inflows fall as investors turn cautious
Analysts noted that total FX inflows through the Nigerian Foreign Exchange Market fell to $716.3 million from $844.7 million in the previous week.
Foreign portfolio investors remained the largest contributors, accounting for 32.98% of inflows, followed by exporters at 30.84%.
The CBN contributed 17.36%, while non-bank corporates provided 16.94%. Individuals and other sources made up less than two per cent combined.
Oil Prices add external pressure
External conditions remain challenging as oil prices softened last week. Brent crude fell to $61.17 per barrel, down 4.05% on the week and over 18% year-to-date, marking its lowest level since October 2024.
According to a report by Market Forces Africa, concerns about an oversupplied market intensified after US projections showed crude output peaking at 13.61 million barrels per day by the end of 2025.
While OPEC expects global oil demand to rise by about 1.4 million barrels per day by 2026, many analysts believe this growth may not fully absorb incoming supply.
With geopolitical risks failing to lift prices, crude fundamentals continue to cap upside, keeping pressure on oil-linked FX earnings for Nigeria.
Source: Getty Images
Overall, the CBN’s timely intervention has steadied the naira, even as global oil dynamics and softer inflows underline the need for sustained FX support and structural inflow growth.
CBN moves to crash dollar with $150m
Legit.ng earlier reported that CBN sold $150 million to authorised dealer banks in a fresh attempt to ease pressure on the naira and improve dollar liquidity in the official market.
Updated market data shows that the intervention came as demand for foreign currency continued to outstrip supply, leading to another round of weakness for the local currency.
FX inflows have remained sluggish despite recent improvements in oil receipts. This imbalance has allowed the dollar to maintain an upper hand, pushing the naira beyond levels analysts expected at this stage of the year.
Source: Legit.ng
