CBN forex support rises as the bank sells $50m to dealers to ease pressure on the naira amid growing dollar demand and market volatility
The Central Bank of Nigeria Governor, Yemi Cardoso, has authorised the sale of $50 million to dealer banks in a fresh effort to ease pressure on the naira as dollar demand intensifies.
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The intervention marks the second such measure in less than six months, following a similar $50 million injection earlier in the year.
The funds were released under the willing buyer, willing seller framework, with the apex bank aiming to strengthen market supply as the currency continues to fluctuate.
The naira traded between 1,447 and 1,460 to the dollar this week, reflecting persistent volatility despite earlier signs of stability.
Market analysts say demand for foreign currency has surged in recent days, placing additional strain on the local unit.
Reports indicate that the naira, which opened at 1,447.7089 on Monday, slipped to 1,455.5981 by Wednesday after touching an intraday high of 1,460.5000.
Before the latest intervention, financial experts had observed that the central bank appeared less aggressive with foreign exchange sales as the naira recorded a brief appreciation phase in previous weeks.
However, the renewed instability prompted what some describe as a necessary corrective measure.
The apex bank took similar action in June, when volatility forced a $50 million sale to major lenders including United Bank for Africa, Access Bank and Zenith Bank.
Expectations of a steady appreciation had risen in October after the naira strengthened for seven successive trading days, with analysts predicting a possible recovery to between 1,400 and 1,450 per dollar by year-end.
That forecast now appears uncertain as market conditions shift once again.
The central bank maintains that Nigeria’s overall economic outlook remains supported by increased crude oil receipts and improved foreign investor interest.
Cardoso recently confirmed that the country’s foreign reserves are at a seven-year high, sufficient to cover more than 10 months of imports.
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Despite this robust buffer, the naira’s latest decline underscores the fragile nature of the foreign exchange market and the complex balance the central bank continues to navigate.
