CBN Intervenes with $190 Million to Curb Naira's Aggressive Rally
The naira faced renewed pressure in the foreign exchange market after the Central Bank of Nigeria took decisive action to slow its recent surge by withdrawing dollars from the system. On Monday, February 23, 2026, the CBN intervened, reportedly mopping up approximately $190 million to counteract the currency's aggressive rally, which had seen it strengthen by over three percent within days. This move, aimed at stabilizing the market, has sparked concerns among analysts about foreign investor sentiment amid ongoing volatility.
Naira Weakens Following Central Bank's Dollar Withdrawal
Following the apex bank's intervention, the naira reversed its gains, weakening further in the official market. At the close of trading on Tuesday, February 24, 2026, the currency fell to N1,355.3745 per dollar, down from N1,349.2352 recorded the previous day. Data from the central bank indicated that this decline occurred as demand outstripped supply, with traders competing for limited dollar liquidity. The naira had initially posted strong gains before retreating in the final three trading sessions ending Friday, February 20, 2026, highlighting the market's sensitivity to regulatory actions.
Analysts Express Concerns Over Foreign Investor Sentiment
Financial analyst and economist Osas Igho commented on the situation, noting that the naira's sharp rally may have unsettled foreign investors. He explained that offshore investors often prefer a deregulated market with a moderately devalued currency, as this can enhance returns when funds are repatriated. A rapidly appreciating currency, he warned, could narrow profit margins and reduce the appeal of carry trades, potentially dampening foreign capital inflows. This reflects a broader debate on balancing currency stability with competitiveness, especially as Nigeria seeks to sustain investment in its economy.
Nigeria's External Reserves Surpass $50 Billion Milestone
Amid the currency fluctuations, the CBN announced that Nigeria's external reserves have exceeded $50 billion. CBN Governor Olayemi Cardoso disclosed this during the Monetary Policy Committee meeting in Abuja on Tuesday, February 24, 2026, stating that the current reserve level is sufficient to finance approximately 9.68 months of imports. This underscores stronger external buffers and improved liquidity conditions, with the central bank aiming to push reserves to their highest level in 15 years. The projection for 2026 anticipates reserves rising to $51.04 billion, supported by easing foreign exchange pressures, improved crude oil earnings, and sustained inflows from remittances and foreign portfolio investments.
Market Outlook and Future Currency Strategy
Market participants are closely monitoring whether the CBN will continue its intervention strategy or allow the naira to find a new equilibrium. The coming weeks are expected to be crucial in determining the currency's direction and investor sentiment in Africa's largest economy. Additionally, the gap between Nigeria's official and parallel foreign exchange markets has narrowed, with the spread tightening to N65 as of Friday, February 13, 2025, following the CBN's decision to reopen dollar sales to Bureau De Change operators. This signals renewed convergence in the currency market, as BDC operators prepare to access fresh dollar supply under the revised retail FX framework.
