CBN says naira not artificially propped up, calls FX stability market-driven
By Aboki Forex —
The Central Bank of Nigeria (CBN) has dismissed claims that it is heavily intervening in the foreign exchange market to prop up the naira. Governor Olayemi Cardoso said the bank’s participation accounts for just 1.2 to 1.3% of total market turnover in 2025.
Cardoso spoke Wednesday in Abuja after the Monetary Policy Committee (MPC) meeting. He said the naira’s recent stability is due to reforms, increased liquidity, and a market-driven system, not artificial support.
“The CBN’s participation in the FX market does not account for much when considering total turnover, just about 1.2 to 1.3% in 2025,” Cardoso told journalists. “The market is now largely working on its own. Our interventions are very marginal relative to total market turnover.”
He noted that total FX market turnover has jumped from an average of $361.1 million to between $550 million and $1 billion, reflecting greater liquidity. The governor attributed the improvement to reforms over the past two years, including the “willing buyer, willing seller” principle and an electronic trading platform that reduced distortions and speculative attacks.
Cardoso also rejected claims that the CBN is depleting external reserves to defend the naira. He said the movement in reserves is for routine obligations such as government payments and loan servicing. Nigeria’s external reserves stand at $49.49 billion, covering about 9.04 months of imports, he added.
The CBN governor announced that a new foreign exchange manual, effective June 1, will improve transparency, standardise market participants, and ease access to FX. He said the reform will make it difficult and unprofitable to divert FX proceeds out of the official market.
Meanwhile, the naira weakened slightly on Tuesday, May 19, in the official Nigerian Autonomous Foreign Exchange Market (NAFEM). It closed at N1,373.87/$1, down 17 kobo from the previous session’s N1,373.70/$1.