- The Central Bank of Nigeria (CBN) has taken urgent steps to stem the naira’s slide amid renewed volatility
- The apex bank unleashed a $250 million firepower in the foreign exchange market to boost liquidity
- Experts have revealed that Nigeria’s robust foreign exchange reserves, which is at a six-year high at $45 billion
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Central Bank of Nigeria has taken a bold step to steady the foreign exchange market, injecting $250 million over the last five trading sessions to fund international payments and ease dollar scarcity.
The move comes amid rising year-end demand for foreign currency and forms part of the apex bank’s broader push to stabilise the naira ahead of 2026 policy targets, according to a report by Daily Sun.
Credit: Novatis
Source: Getty Images
Dollar pressure pushes naira before rebound
The intervention was executed directly in the official market, increasing dollar supply to banks and authorised dealers at a time when demand had begun to outpace available liquidity.
Despite the sizeable intervention, the naira initially came under pressure as importers, corporates, and other FX users rushed to secure dollars.
The spot exchange rate climbed to a weekly high of N1,456 per dollar, reflecting the intensity of demand in the Nigerian Foreign Exchange Market.
However, the naira staged a late rebound after the CBN’s sustained dollar sales filtered through the market.
The increased availability of FX helped prevent sharper depreciation and restored some confidence among traders, even though the currency still weakened by N3.98 against the dollar over the week.
How the dollar sale impacted the naira
The $250 million injection played a stabilising role rather than triggering an outright naira rally.
By boosting liquidity, the CBN was able to narrow supply gaps and reduce panic buying.
Analysts note that without the intervention, the naira could have slid more aggressively, especially given seasonal demand pressures.
In addition to CBN sales, FX inflows from foreign portfolio investors, exporters, and non-corporate banks helped ease demand pressure. This combination slowed the pace of depreciation and anchored the naira within a tighter trading range.
External reserves strengthen CBN’s hand
Backing the intervention is a steady rise in Nigeria’s external reserves. Gross FX reserves increased for the twenty-fifth consecutive week, climbing by $396.84 million week on week to reach $45.44 billion.
The growing reserve buffer gives the CBN more room to intervene in the market without immediately raising concerns about reserve adequacy.
Market watchers say the reserve build-up has become a key confidence signal, reassuring investors that the central bank can continue to smooth volatility when needed.
Global market signals add mixed pressure
Elsewhere, global commodity markets sent mixed signals. Oil prices closed lower, posting a 4 percent weekly decline as fears of a supply glut and hopes of a Russia-Ukraine peace deal outweighed geopolitical risks.
Brent crude settled at $61.12 per barrel, while WTI closed at $57.44 per barrel.
Credit: CBN
Source: Twitter
In contrast, gold prices surged to their highest level in over a month after a US Federal Reserve rate cut weakened the dollar. Spot gold rose 2.51 percent to $4,302.43 per ounce, highlighting growing investor preference for safe-haven assets.
Market outlook remains cautious
Analysts expect cautious trading in the near term, with the naira likely to remain sensitive to dollar demand trends and further CBN actions.
Market Forces Africa reports that while the $250 million intervention has helped calm the market, sustained stability will depend on consistent FX inflows, disciplined demand management, and supportive global conditions.
For now, the CBN’s bold dollar sale has sent a clear signal: the naira will not be left to drift unchecked.
Prior report by Legit.ng disclosed that there is an uptick in dollar in demands in the FX market.
However, analysts allayed fears of further depreciation of the naira, citing Nigeria’s robust reserves as a buffer.
CBN moves to crash dollar qith $150 million
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.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
