The Central Bank of Nigeria has taken decisive action to support the national currency by injecting $50 million into the foreign exchange market. This intervention comes as the naira faces renewed pressure from rising dollar demand, creating volatility in exchange rates.
Forex Market Intervention Details
According to financial reports, the apex bank sold the $50 million to authorized dealer banks through a willing buyer, willing seller arrangement. This marks the second such intervention in less than six months, highlighting the persistent challenges in maintaining naira stability.
The currency has demonstrated significant volatility this week, trading between 1,447 and 1,460 naira to the US dollar. This fluctuation occurred despite earlier indications that the naira was gaining stability, suggesting underlying market pressures continue to affect currency performance.
Historical Context of CBN Interventions
This is not the first time the Central Bank has intervened to support the naira. In June 2025, the bank executed a similar $50 million injection when the currency experienced prolonged depreciation. Major financial institutions including United Bank for Africa (UBA), Access Bank, and Zenith Bank participated in that earlier intervention.
Analysts have noted that the CBN had recently adopted a less aggressive approach to foreign exchange sales as the naira showed signs of strengthening. However, the current market conditions have forced the bank to return to active intervention strategies.
Naira Performance Against Economic Indicators
Interestingly, the naira's struggles come despite positive economic fundamentals. CBN Governor Yemi Cardoso recently confirmed that Nigeria's foreign reserves have reached a seven-year high of $46.7 billion, sufficient to cover more than ten months of imports.
Cardoso attributed previous naira gains to several factors:
- Increased crude oil sales
- Improved market liquidity
- Strategic policies aimed at exchange rate stabilization
Despite these positive indicators, the naira has failed to maintain its appreciation trajectory. In October, the currency showed seven consecutive days of gains in the official forex market, appreciating by 0.17% according to Nigerian Foreign Exchange Market data.
Financial analysts had previously predicted the naira could strengthen to between 1,400 and 1,450 naira per dollar by year's end. However, the current volatility and necessary CBN intervention make this prediction increasingly uncertain.
The Nigerian economy continues to navigate complex foreign exchange dynamics as authorities balance between market forces and strategic interventions to maintain currency stability.
