CBN Crashes Naira Further, Mops Up Dollars Amid Reserves Increase
- The naira gains against the US dollar as CBN intervenes to stabilise the currency’s appreciation
- Nigeria's external reserves rise by $736.67 million, bolstering market confidence amid stabilising factors
- Global oil prices decline while gold prices rally, showcasing contrasting trends in commodity markets
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigerian naira posted fresh gains against the US dollar at the official foreign exchange window last week, prompting the Central Bank of Nigeria to step into the market with a reverse intervention aimed at slowing the currency’s rapid appreciation.
The naira strengthened at the Nigerian Foreign Exchange Market in an environment of subdued demand pressures, supported by steady inflows from foreign portfolio investors, exporters, and non-bank corporates.
Source: Getty Images
The improving liquidity conditions lifted the local currency to levels that appeared to unsettle the monetary authorities.
According to TrustBanc Financial Group Limited, the CBN purchased about $72 million from the FX market as the naira’s gains accelerated, marking a shift from its earlier defensive posture to a more stabilising role.
Dollar inflows boost market liquidity
Analysts noted that increased offshore investor participation in Nigeria’s financial markets has continued to drive higher dollar supply, reflecting the appeal of elevated yields on local investment instruments.
From a closing rate of about ₦1,445 per dollar on December 30, the naira gained roughly ₦87, reaching an intra-week low of ₦1,358 per dollar before the CBN’s intervention.
The rapid pace of appreciation triggered the Apex Bank’s move to absorb excess dollar liquidity.
Following the intervention, the naira eased slightly, depreciating by ₦7.77 at the official window to close at ₦1,366.06 per dollar, according to TrustBanc’s market note.
Weekly performance remains positive
Despite the brief pullback, the naira ended the week on a stronger footing. It appreciated by ₦20.36 to close at ₦1,366.1954 per dollar, compared with ₦1,386.55 recorded at the previous week’s close.
Throughout the week, the currency traded within a relatively tight band of ₦1,348.00 and ₦1,396.00 per dollar, recording gains across all trading sessions and reinforcing positive sentiment in the FX market.
Analysts at Anchoria Securities Limited said the near-term outlook for the naira remains supportive, driven by rising external reserves, renewed foreign portfolio inflows, and a decline in speculative demand.
Economist and senior banker, Janet Ogochukwu, disclosed to Legit.ng that the CBN's action was deliberate to close the gap between the forex markets.
"Currently, the gap between the official and parallel markets is about N94. This is too much. While the naira was rallying fast in the official market, its was falling in the parallel window, creating a wide gap in the exchange market and defeating the government's purpose," she said.
External reserves strengthen confidence
Nigeria’s gross external reserves climbed sharply last week, rising by $736.67 million to $46.91 billion. .
The increase was supported by inflows from oil receipts, remittances, and other non-oil sources, providing a stronger buffer against short-term external shocks.
Anchoria Securities said FX market stability is likely to persist in the near term, underpinned by policy measures and improving investor confidence as reserves continue to grow.
Oil weakness, gold shines
Meanwhile, global oil prices softened over the week, with Brent crude falling by 3.21 per cent to $67.60 per barrel from $70.69.
The decline was driven by persistent oversupply concerns, as rising non-OPEC+ output and modest demand growth outweighed geopolitical risks.
Source: Getty Images
Anchoria Securities forecasts Brent crude trending toward the low $60s in 2026, citing structural oversupply as the dominant theme.
In contrast, gold prices rallied strongly. Spot gold gained more than $100 last week to close near $4,966.22 per ounce, supported by dip buying after briefly falling below the $4,800 level, positioning the metal for a solid weekly gain.
Naira starts new week on high as reserves surge
Legit.ng earlier reported that the naira opened the new trading week on a stronger footing, extending gains recorded at the close of last week as rising external reserves lifted confidence across Nigeria’s foreign exchange markets.
Data from the Central Bank of Nigeria showed the local currency appreciated by 1.5 per cent week on week at the Nigerian Foreign Exchange Market, reflecting sustained demand-supply balance improvements.
At the official market, the naira closed at N1,366.19 per dollar on Friday, February 6, 2026 up from N1,386.55 at the end of the previous week, which marked the final trading session of January 2026.
Source: Legit.ng
