CBN’s Policy Finally Pays Off as Naira Records Big Gain Across All Markets

• The naira rose by N5.72 across all foreign exchange markets, with exporters and non-bank financial institutions contributing significantly to the supply
• Despite consistent inflows, the naira fell by 0.25% week-on-week in the official spot market, marking its third consecutive week of decline.
• The World Bank’s latest report highlighted that Nigeria’s foreign exchange market still heavily relies on CBN interventions and foreign portfolio investments

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

On Monday, 12th May, the value of the naira increased by N5.72 across all foreign currency (FX) markets.

According to data from the Central Bank of Nigeria (CBN), the dollar was quoted at N1,600.43, up 0.4% from N1,606.15 on Friday at the Nigerian Foreign Exchange Market (NFEM).

Consistent inflows helped to sustain the growth, with exporters and non-bank financial institutions accounting for 62.44% of the overall supply.

According to a report by the research division of Coronation Merchant Bank, inflows into the NFEM window totalled $619 million, a 7.34% decrease from the $668 million reported the week before.

Foreign Portfolio Investors (FPIs) supplied 16.78% of the overall inflow, while the CBN contributed 18.00%.

Non-bank corporates led with 34.27%, followed by exporters at 28.17%. The remaining 2.78% came from other sources.

ChannelsTV reported that based on evidence from online data aggregating platforms and street sellers, the value of the naira stayed stable at N1,625 per dollar in the parallel market, popularly referred to as the black market.

Despite the CBN's involvement, the naira saw a fall of 0.25% week-on-week (w/w) against the dollar in the official spot market last week, closing at N1,606.15/US$1. This marked the third consecutive week of declines.

The increase coincides with the World Bank's statement that, notwithstanding recent market liberalisation measures, the CBN's interventions and foreign portfolio investor (FPI) inflows continue to dominate Nigeria's foreign exchange market turnover.

As per the Bank's most recent Nigeria Development Update report, "Building Momentum for Inclusive Growth," which was made public on Monday, the market still depends largely on CBN interventions, which are frequently intended to control volatility and short-term foreign portfolio investments driven by high yields and possible revaluation gains, even though overall foreign exchange turnover has improved due to recent policy changes.

“Although helpful as a source of FX, debt financing, and external adjustment, FPI flows are volatile, especially when they are short-term, as is predominantly the case for Nigeria,” the report noted.

“For full consolidation of the FX market, traditional sources of inflows such as oil exports and remittances must return consistently and substantially to the official window.”

Naira crashes against US dollar to lowest level in 2025

Legit.ng reported that the Naira fell to its lowest level in 2025 against the US dollar at the parallel market, also known as the black market, on Thursday, May 8.

Currency traders who spoke to Legit.ng revealed that the Nigerian currency on Friday crashed to N1,628 per dollar.

Friday’s exchange rate shows a depreciation of N23 compared to the rate of N1,605 quoted on Friday, May 2.

Source: Legit.ng