CBN Signals Preference for Naira Stability, Purchases $72m

The Central Bank of Nigeria has stepped up efforts to stabilise the naira, purchasing $72 million from the currency market last week in a move aimed at curbing speculative activity and reinforcing confidence in the official exchange window.

The intervention comes amid a sharp appreciation of the naira across both official and parallel markets. At the official window, the naira strengthened by 1.47 per cent week-on-week, closing at ₦1,366.20 per dollar compared with ₦1,386.55 the previous week.

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In the parallel market, the currency appreciated by 0.34 per cent to ₦1,460 per dollar, from ₦1,465 previously. Despite these gains, the spread between the two markets widened to ₦93.80, reflecting persistent demand for foreign currency in cash transactions.

Analysts at Coronation Merchant Bank noted that the widening premium is being driven largely by early positioning ahead of the 2027 election cycle, rather than immediate pressures within the official FX market.

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Nigeria’s external reserves rose significantly during the week, increasing by $736.68 million to $46.92 billion. The build-up provides additional buffers for the CBN to manage FX liquidity and sustain market confidence.

Looking ahead, market watchers expect the apex bank to maintain a policy focus on exchange rate stability rather than pursue aggressive appreciation.

This strategy is likely to be anchored on disciplined monetary policy, measured interventions, and prudent reserve management, aimed at sustaining investor confidence while containing volatility in the foreign exchange market.