The Nigerian naira appreciated to N1,615.00/$1 at the official foreign exchange market on Tuesday, strengthening from Monday’s closing rate of N1,629.00/$1.
This is according to data published on the Central Bank of Nigeria’s (CBN) official website.
The marginal gain in the official exchange rate follows renewed interventions by the apex bank aimed at easing pressure on the local currency and reducing volatility in the foreign exchange (FX) market.
In the parallel market, however, the naira traded at N1,610.00/$1 on Tuesday, slightly above the official rate
The narrowing gap between both rates suggests growing effectiveness of recent monetary actions by the CBN, market operators say.
In an effort to stabilise the naira, our reporter gathered that the CBN sold an estimated $200 million at multiple official exchange windows on Monday.
This move comes on the heels of a $197 million intervention on Friday, and a cumulative $124 million disbursed earlier last week.
These back-to-back FX sales reflect the CBN’s aggressive posture toward managing speculative activity, improving FX liquidity, and calming demand-side pressures.
Speaking to many Bureau De Change (BDC) and forex traders confirmed a slight drop in street demand for the dollar following the CBN’s interventions.
A forex dealer in Sheraton area in Abuja said, “It looks like the pressure has eased slightly in the past two days. We hear the CBN is now selling more dollars to banks, it’s making some people hold off on buying. Let’s wait and see if this continues in the coming days.”
Another operator in Wuse Zone 4 noted that while the gains are encouraging, market sentiment remains cautious.
“We’ve seen gains like this before. If the supply continues and CBN keeps coming in, the rate could go below N1,600. But right now, people are still not sure if this is sustainable.”
The forex traders attribute the volatility in the foreign exchange market to the Central Bank’s inconsistent dollar allocations to Bureau De Change (BDC) operators.
They urged the apex bank to be consistent in its interventions.
The CBN’s stepped-up FX interventions signal a commitment to aligning the naira with market fundamentals while addressing hoarding and arbitrage concerns that have plagued the FX market in recent months.
Analysts say the CBN’s recent actions may reflect an evolving strategy to instill confidence among investors and FX market participants, while ensuring that critical sectors of the economy, such as manufacturing and import-dependent businesses, have improved access to forex at stabilized rates.
