CBN stabilises naira by buying $190M, slowing currency gains and narrowing FX market spread amid rising oil prices and reform-driven inflows

The Central Bank of Nigeria (CBN) intervened in the foreign exchange market last week, purchasing about $190 million to moderate rapid gains in the naira at the official window.

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After a period of sharp appreciation, the local currency retreated over the last three trading sessions ending Friday, prompting the CBN to absorb excess dollars and prevent market disruption.

Analysts warned that continued naira rallies could prompt foreign investors to exit the fixed-income market, increasing demand for the US dollar and risking currency instability.

TrustBanc Financial Group Limited reported that the naira strengthened across both official and parallel segments.

The official window appreciated by N9.09 week-on-week to N1,346.32/$, while the parallel market gained N60 to close at N1,340/$.

The FX spread narrowed sharply to 0.47 per cent from 3.29 per cent the previous week, signalling improved convergence between markets.

According to analysts, the CBN’s dollar purchases aim to maintain stability without discouraging investment.

The apex bank’s intervention marks one of the first significant FX buybacks in recent times, signalling caution amid rising reserves and firm oil prices.

Also read: CBN Policy Sparks Optimistic Naira Outlook

Macro factors, including reform-driven inflows and geopolitical considerations, continue to influence market dynamics, but the naira has remained relatively stable despite underlying pressures.