The CBN made another intervention in the foreign exchange market to support the naira. Despite reduced FX interventions, improved transparency through automated currency trading platforms has encouraged foreign portfolio investors to participate more actively in the financial markets.
While the naira has shown gains on the BMatch electronic FX trading platform, exchange rates at the Nigerian autonomous foreign exchange window have fluctuated. Nonetheless, the two spot rates are nearing convergence, although the official spot rate weakened under renewed demand pressure.
On Wednesday, the naira depreciated to close at ₦1,545 per dollar, according to FMDQ platform data. This occurred despite the CBN selling $28.5 million to authorized deposit money banks at rates ranging from ₦1,500 to ₦1,549 per dollar. Analysts expect the exchange rate to stabilize, supported by enhanced transparency and the CBN’s interventions.
Explaining the fluctuations, a Broadstreet analyst remarked that such variability is inherent to efficient FX markets. “Forex trading isn’t robotic; demand and supply dynamics naturally cause the rates to fluctuate,” the analyst explained.
