The Central Bank of Nigeria (CBN) has intervened in the foreign exchange market with a $50 million injection to ease dollar scarcity and reduce volatility at the official trading window. The move came after increased dollar demand put pressure on the naira throughout the week.
The apex bank sold the dollars to authorised dealer banks to smoothen fluctuations, resulting in the naira closing the week at ₦1,535.03 per US dollar. This represents a depreciation of ₦2.52 kobo from the week’s opening rate of ₦1,532.51.
Analysts noted that the intervention, alongside higher inflows from foreign portfolio investors following the Open Market Operation (OMO) auction, helped strengthen market confidence. In addition, Nigeria’s external reserves grew by $353.47 million week-on-week to $41.08 billion — the highest level since December 2021.
Despite these gains, pressure remains in the forward market, where hedging contracts signalled expectations of further naira depreciation. According to Cordros Capital Limited, forward FX rates weakened across all tenors last week. The one-month contract settled at ₦1,577.40 per dollar, the three-month contract dropped to ₦1,653.75, while six-month and one-year contracts closed at ₦1,763.94 and ₦1,975.62 respectively.
Most analysts, however, remain optimistic about the naira’s short-term outlook. They forecast relative stability, supported by robust FX liquidity, sustained inflows from foreign portfolio investors attracted by carry trade opportunities, and improving non-oil exports. They also expect limited incentives for speculation to reinforce inflows from domestic sources.
With reserves at a three-year high and liquidity injections continuing, observers say the CBN appears committed to defending the naira while maintaining investor confidence in the FX market.
