The Central Bank of Nigeria (CBN) increased its interventions in the foreign exchange market last week, selling $198 million to authorized dealer banks over four days. This move aimed to boost FX liquidity and stabilize the naira as the year-end approaches. Market analysts noted the crucial role of CBN’s intervention in influencing exchange rate trends.
Bizwatch Nigeria reported that the CBN had sold $124.6 million in the previous week, signaling renewed commitment to FX auctions following the launch of an electronic FX trading platform for banks earlier in December 2024. Heavy demand in the market necessitated increased liquidity at the official window.
The FX sales began on Monday, with the CBN selling $30.5 million at rates between ₦1,520 and ₦1,547. By the week’s close, the central bank had sold $197.7 million. Despite these efforts, the naira’s value remained under pressure, closing at ₦1,540 at the official market on Friday, a slight loss of ₦2 from earlier levels. Gross external reserves increased to $40.761 billion during the week, according to CBN data.
Cordros Capital Limited projected that FX liquidity would remain constrained due to weak inflows from autonomous sources. Without significant CBN intervention, the naira may face continued depreciation pressure in the medium term.
