Naira holds firm at N1,362/$ as CBN pumps $500m into forex market

The Nigerian naira closed at N1,362.2064 per dollar at the official market on Monday after the Central Bank of Nigeria stepped in to defend the currency. Total foreign exchange inflows for the week reached $1.01 billion, with the CBN supplying nearly half of the entire volume.

The naira remained relatively stable at the Nigerian Foreign Exchange Market (NFEM) on Monday, trading around N1,362 to the US dollar. This came after the CBN stepped up interventions to support the local currency. The opening rate was N1,362.0866, and the naira posted only a marginal decline during the session.

Naira gains 1.31% over previous week

The naira strengthened at the official market over the previous trading week. It appreciated by 1.31% to close at N1,362.09 per dollar on Friday, compared with N1,380.18 recorded a week earlier. The improvement followed renewed interventions by the CBN, which injected significant foreign exchange liquidity into the market to reduce pressure from persistent dollar demand. Eligible foreign exchange transactions were conducted within a range of N1,359 to N1,365.50 per dollar, according to data from the apex bank.

Broadstreet analysts said the movement in the spot exchange rate reflects relative stability in the official market. They attributed it to the CBN’s interventions and steady inflows from foreign investors and other market participants.

Interbank turnover drops sharply despite stable rate

Despite the naira’s improved performance, activity in the interbank foreign exchange market weakened considerably. Interbank FX turnover closed at $39.59 million on Monday, a decline of about 56% from the $89.08 million recorded at the end of trading on Friday, according to a report by MarketForces Africa. The sharp reduction indicates lower transaction volumes among financial institutions, even as the official exchange rate remained largely stable. Market analysts said reduced turnover could reflect cautious trading by banks and authorised dealers as they monitor the direction of the naira and the CBN’s liquidity management strategy.

CBN supplied half of total FX inflows

A report by Coronation Merchant Bank Limited showed that total foreign exchange inflows into the Nigerian market reached $1.01 billion during the week. The CBN accounted for the largest share, contributing $500 million, or 49.36% of total inflows. Foreign portfolio investors followed with $260 million, representing 26.03%. Exporters contributed $140 million, or 13.85%. Non-bank corporates supplied $90 million, accounting for 9.02% of total inflows. Other corporates contributed about $10 million, while inflows from individuals and foreign direct investors remained marginal.

Nigeria’s gross external reserves also recorded a modest improvement, rising by 0.17% to $52.03 billion from $51.94 billion within five days. Coronation Merchant Bank said the increase, though modest, strengthens the CBN’s capacity to sustain its foreign exchange interventions in the near term.

What this means for the naira and businesses

Analysts expect the naira to trade within a narrow range in the coming days, supported by continued FX inflows and the CBN’s willingness to supply dollars to the market. However, sustained demand for foreign currency remains a key risk. The strength of future interventions and inflows will determine whether the naira can maintain its recent gains. For Nigerian businesses, the stability offers some relief from exchange rate volatility, but the sharp drop in interbank turnover signals that caution still dominates the market.