The Central Bank of Nigeria (CBN) intervened in the foreign exchange market last week with a $50 million injection into authorized dealer banks to ease volatility and stabilize liquidity.
The move came amid rising dollar demand in the official market, which had put pressure on the naira. The local currency closed the week at N1,535.03 per dollar, down from N1,532.51, marking a week-on-week depreciation of N2.52.
The CBN’s intervention was complemented by higher inflows from foreign portfolio investors following the OMO auction, boosting liquidity and market confidence. Data also showed that Nigeria’s gross external reserves rose to $41.08 billion, the highest since December 2021, after a weekly increase of $353.47 million.
Despite these interventions, pressure remained evident in the forward market. According to Cordros Capital Limited, forward FX contracts depreciated across the curve: the one-month rate slipped to N1,577.40 per dollar, three-month fell to N1,653.75, six-month declined to N1,763.94, and the one-year rate eased to N1,975.62.
Analysts believe the naira will remain relatively stable in the near term, supported by robust liquidity and consistent CBN interventions. They also expect sustained inflows from foreign investors due to attractive carry trade opportunities and improving confidence in Nigeria’s FX market.
In addition, growing non-oil export receipts and reduced speculative activities are expected to reinforce steady dollar inflows from domestic sources, ensuring stability in the official market.
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