Naira Holds Steady around N1,367/$ as CBN interventions, strong reserves and market measures help support Nigeria’s foreign exchange stability

The Nigerian naira has maintained relative stability around N1,367 per US dollar in the foreign exchange market, supported by continued interventions from the Central Bank of Nigeria (CBN) and improved foreign exchange supply conditions.

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Market activity during the week showed limited movement in the currency pair, with analysts pointing to stronger dollar liquidity measures and reduced speculative pressure as key factors behind the naira’s performance.

The latest stability comes as the CBN continues efforts to manage volatility through direct foreign exchange sales to authorised dealers, including Bureau de Change operators, while monitoring demand pressures in the market.

Nigeria’s external reserves, estimated at about $52.5 billion, have provided additional confidence in the country’s ability to respond to currency pressures and support import obligations.

The naira’s current trading range remains closely watched, with analysts identifying the N1,400 per dollar level as an important psychological barrier that could influence market sentiment if breached.

The CBN has also maintained a tight monetary stance, including a 45 per cent Cash Reserve Ratio for banks, as part of efforts to control excess liquidity and reduce pressure on the currency.

High interest rates have continued to support demand for naira-denominated assets, including government bonds and money market instruments, attracting interest from local and international investors.

However, analysts noted that sustained stability will depend on Nigeria’s ability to maintain strong foreign exchange reserves, improve dollar inflows and balance inflation control with economic growth.

The medium-term outlook remains mixed, with expectations that the naira could continue trading within a narrow range while facing gradual depreciation pressures due to differences in inflation between Nigeria and the United States.

Analysts identified the N1,420 to N1,450 per dollar range as a possible resistance zone where increased corporate demand or temporary liquidity shortages could create renewed pressure on the currency.

Meanwhile, global currency markets have also been influenced by movements in the US dollar index, which traded near 99.75 amid uncertainty surrounding diplomatic developments involving the United States and Iran.

The dollar has received support from safe-haven demand as markets monitor discussions between Washington and Tehran, alongside comments from US Federal Reserve officials on the future direction of interest rates.

Nigeria’s foreign exchange outlook will continue to depend on both domestic policy measures and global developments, particularly crude oil prices, investor confidence and international currency movements.

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For now, the naira remains relatively stable, with CBN interventions playing a central role in preventing sharp exchange rate swings while authorities continue efforts to strengthen market confidence.