The Central Bank of Nigeria (CBN) provided 30.5% of U.S. dollar inflows into the official foreign exchange (FX) market last week, a move that contributed to the strengthening of the naira.
The apex bank’s sustained interventions continue to influence the direction of the exchange rate, while investor confidence has remained firm amid the steady inflow of foreign exchange. Analysts have linked this resilience to the recent growth in Nigeria’s external reserves, which serve as a buffer to the CBN’s efforts in stabilizing the naira.
As part of its measures to boost dollar supply, the CBN issued Open Market Operation (OMO) bills to foreign portfolio investors in a bid to attract hard currency. Market data showed that inflows into the official FX window have been on a mild decline, although demand pressures for the dollar were described as minimal despite occasional surges.
According to Coronation Merchant Bank’s research report, total FX inflows closed the week at $567.2 million, compared to $706.7 million recorded in the previous week. The report highlighted that foreign portfolio investors led inflows with $184.1 million, representing 32.5% of the market’s total.
The CBN followed closely, injecting $173.1 million, which accounted for 30.5% of inflows into the official market. Exporters contributed 16.6% of inflows, while non-bank corporates accounted for 16.2%. Other sources made up the remaining 4.3%.
Meanwhile, the naira appreciated by 1.10% to close at ₦1,514.87 per U.S. dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM). In the parallel market, the currency remained stable at ₦1,540 per dollar, leaving a spread of ₦26.
With the CBN actively supporting liquidity in the market and external reserves on the rise, analysts believe Nigeria’s exchange rate stability will continue to improve in the short to medium term.
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