CBN Signals Preference for Naira Stability, Purchases $72m
The Central Bank of Nigeria (CBN) aims at stabilizing the naira exchange rate at the official currency market and removing speculative tendencies across the market.
The authority has ramped up $72 million from the currency market last week, following a fast and furious naira appreciation in recent times, deviating from usual FX sales interventions.
The Naira recorded a broad-based appreciation against the US Dollar across both official and parallel markets during the review period.
At the official window, the currency strengthened by 1.47% week-on-week, closing at N1,366.20/US$, compared with N1,386.55/US$ in the preceding week.
The Naira appreciated in the parallel market by 0.34% to N1,460.00/US$, from N1,465.00/US$ previously. Despite these gains, the spread between the parallel market rate and the official exchange rate widened to N93.80.
This widening premium, according to Coronation Merchant Bank Limited, reflects persistent demand for foreign currency, especially in cash in the informal market.
The research subsidiary of the bank revealed that this was driven largely by early positioning ahead of the 2027 election cycle, rather than near-term pressures within the official FX market.
Meanwhile, Nigeria’s gross external reserves rose significantly, increasing by US$736.68 million week-on-week to US$46.92 billion, from US$46.18 billion. The continued build-up in reserves provides additional buffers for the CBN to support its efforts to manage FX liquidity and reinforce market confidence.
“Looking ahead, we expect the CBN to maintain a policy focus on exchange rate stability rather than pursue aggressive currency appreciation through 2026.
“This approach is likely to be anchored on disciplined monetary policy, measured foreign exchange interventions, and prudent reserve management, aimed at sustaining investor confidence while containing volatility in the foreign exchange market”, Coronation said. #CBN Signals Preference for Naira Stability, Purchases $72m#
