CBN Explains Naira Exchange Rate Performance Against US Dollar
- CBN says it is not heavily intervening in FX, with support for the naira at about 1.2–1.3% of market turnover.
- Governor Cardoso attributes naira stability to reforms, liquidity, and a market-driven FX system.
- Nigeria’s reserves remain strong at $49.49bn as FX turnover and transparency improve.
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The CBN says the Naira is not being artificially propped up, stressing that the stability witnessed recently is market-driven following reforms and increased liquidity.
This was revealed on Wednesday by Governor Olayemi Cardoso while briefing journalists in Abuja after the Monetary Policy Committee (MPC) meeting.
Source: Getty Images
The Governor said:
"The CBN's participation in the FX market does not account for much when considering total turnover, just about 1.2 to 1.3% in 2025, and has dismissed claims that the Bank has been defending the naira."
He pointed out that after the past two years' reforms of the foreign exchange market, the market had become much more transparent and market-driven.
He added:
"The market is now largely working on its own. Our interventions are very marginal relative to total market turn".
Cardoso explained that with the total market turnover jumping from an average of $361.1 million to between $550 million and $1 billion, it occasionally reflects greater liquidity.
Cardoso said:
"In 2025, it was about 1.2 to 1.3%. That is not what is driving the market."
Punch reports that the governor added that, with increased transparency and information sharing between CBN and market participants, coupled with adoption of the "willing buyer, willing seller" principle and use of an electronic trading platform that has minimised distortions in the market and speculatory attacks that had driven the exchange rate in the past.
Source: Getty Images
CBN FX reserves
Cardoso also debunked the idea that he has been depleting the reserves to maintain the stability of the currency, but revealed that the movement was in respect of ordinary obligations due.
He argued that:
"So to answer your question, no, what we have done and which is normal is that in the course of daily activities there may be need to meet the requirements of various arms of government or loans outstanding obligations due, they have to be paid."
According to the CBN governor, the new foreign exchange manual that will commence on June 1 would improve transparency, standardisation of market participants, and ease access to foreign exchange.
He further stated that the reform will make it difficult and not very rewarding to divert foreign exchange proceeds out of the market officially, ThusDay reports.
Cardoso stated that Nigeria's external reserves stand at $49.49 billion, which covers about 9.04 months of imports.
CBN, banks update new exchange rates
Earlier, Legit.ng reported that the naira has weakened slightly against the United States Dollar, while other currencies remain relatively steady at both
Latest data from the Central Bank of Nigeria showed that the naira weakened slightly against the United States Dollar on Tuesday, May 19, in the official Nigerian Foreign Exchange Market (NAFEM).
The local currency depreciated by 17 Kobo or 0.01% to close at N1,373.87/$1, compared with N1,373.70/$1 recorded in the previous trading session.
Source: Legit.ng
