CBN Defends Naira, Banks Get $120m as External Reserves Drop
Sustaining its intervention in the foreign exchange market, the Central Bank of Nigeria (CBN) sold $120 million to authorised dealer banks in two tranches last week as part of an effort to defend the local currency, the naira, amidst sliding external reserves.
The monetary authority conducted two foreign exchange intervention sales last week, offering a total of $120 million to authorised dealer banks. Bids cleared between ₦1,581.92 and ₦1,593 for the two FX offered to banks to drive liquidity. In its shows of strength, the local currency appreciated against the dollar in the last trading session.
The FX market traded moderately, with the naira showing resilience despite rising demand pressures, analysts said. The pair opened strong, buoyed by decent liquidity and end-of-month flows, trading mostly within the $/₦1,575–₦1,595 range, AIICO Capital Limited said in a note.
Naira fixings fluctuated, initially strengthening to ₦1,584.38 before weakening midweek to ₦1,592.67, and finally settling at ₦1,586.15—reflecting a 36 bps week-on-week depreciation. AIICO told investors that FX market momentum was driven by local demand and exporter flows, with NAFEX trades ranging from ₦1,500 to ₦1,600.14.
According to data obtained from the CBN foreign exchange movement, the nation’s foreign reserves declined by $85.93 million week on week to $38.46 billion. The external reserves recently witnessed consistent inflows amidst price fluctuation in the global commodity market.
U.S. crude prices declined on Friday as markets anticipated that OPEC+ would announce a larger-than-expected increase in July oil production during its Saturday meeting.
Brent crude futures dropped 25 cents, or 0.39%, to settle at $63.90 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 15 cents, or 0.25%, to $60.79, after earlier falling over $1.
Meanwhile, gold prices dipped as the U.S. dollar strengthened, and investors assessed recent tariff news. A softer inflation reading maintained expectations of a possible Federal Reserve rate cut.
Spot gold fell 0.7% to $3,293.59 per ounce and was down 1.9% for the week. Outlook: While prices are expected to hold within their current range near-term, they could decline toward the high $50s by yearend.
