BREAKING: CBN Crashes Naira as New Rate Emerges

The Nigerian naira posted fresh gains against the US dollar at the official foreign exchange window last week, prompting the Central Bank of Nigeria to step into the market with a reverse intervention aimed at slowing the currency’s rapid appreciation.

The naira strengthened at the Nigerian Foreign Exchange Market in an environment of subdued demand pressures, supported by steady inflows from foreign portfolio investors, exporters, and non-bank corporates.

The improving liquidity conditions lifted the local currency to levels that appeared to unsettle the monetary authorities.

According to TrustBanc Financial Group Limited, the CBN purchased about $72 million from the FX market as the naira’s gains accelerated, marking a shift from its earlier defensive posture to a more stabilising role.

Dollar inflows boost market liquidity

Analysts noted that increased offshore investor participation in Nigeria’s financial markets has continued to drive higher dollar supply, reflecting the appeal of elevated yields on local investment instruments.

From a closing rate of about ₦1,445 per dollar on December 30, the naira gained roughly ₦87, reaching an intra-week low of ₦1,358 per dollar before the CBN’s intervention.

The rapid pace of appreciation triggered the Apex Bank’s move to absorb excess dollar liquidity.

Following the intervention, the naira eased slightly, depreciating by ₦7.77 at the official window to close at ₦1,366.06 per dollar, according to TrustBanc’s market note.

Weekly performance remains positive

Despite the brief pullback, the naira ended the week on a stronger footing. It appreciated by ₦20.36 to close at ₦1,366.1954 per dollar, compared with ₦1,386.55 recorded at the previous week’s close.

Throughout the week, the currency traded within a relatively tight band of ₦1,348.00 and ₦1,396.00 per dollar, recording gains across all trading sessions and reinforcing positive sentiment in the FX market.

Analysts at Anchoria Securities Limited said the near-term outlook for the naira remains supportive, driven by rising external reserves, renewed foreign portfolio inflows, and a decline in speculative demand.

Economist and senior banker, Janet Ogochukwu, disclosed to Legit.ng that the CBN’s action was deliberate to close the gap between the forex markets.

“Currently, the gap between the official and parallel markets is about N94. This is too much. While the naira was rallying fast in the official market, its was falling in the parallel window, creating a wide gap in the exchange market and defeating the government’s purpose,” she said.

External reserves strengthen confidence

Nigeria’s gross external reserves climbed sharply last week, rising by $736.67 million to $46.91 billion. . The increase was supported by inflows from oil receipts, remittances, and other non-oil sources, providing a stronger buffer against short-term external shocks.

Anchoria Securities said FX market stability is likely to persist in the near term, underpinned by policy measures and improving investor confidence as reserves continue to grow.