The naira has maintained stability at around ₦1,500 per U.S. dollar in the parallel market. Analysts attribute this stability to the CBN’s interventions, which have helped manage forex supply and demand.
However, the CBN has stopped selling dollars to authorized dealer banks since last week, and this trend has continued into the current week. Despite this, forex liquidity remains sufficient for now, and analysts believe the market can function independently without CBN intervention for a while.
Factors supporting exchange rate stability include:
- Lower U.S. dollar interest rates, making naira-denominated assets more attractive.
- The CBN’s undisclosed U.S. dollar swap repayments, which have helped ease demand pressures in the forex market.
In the parallel market, Bureau de Change (BDC) operators sold dollars at ₦1,490, as demand pressures remained low. The CBN allows BDC operators to purchase $25,000 at the official exchange rate from Nigerian banks, reducing the gap between the official and black market rates and limiting speculative activities.
However, maintaining this exchange rate stability has come at a significant cost. Nigeria’s foreign reserves, which recently hit a three-year high, have now declined to approximately $39 billion, signaling the strain of ongoing forex interventions.
