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Daniel Adaj
The Central Bank of Nigeria (CBN) has injected $197.71m into the foreign exchange (FX) market to stabilize liquidity and ensure the smooth functioning of the market.
This intervention, carried out on Friday, is part of the CBN’s ongoing efforts to foster a stable and transparent FX market amidst global economic fluctuations.
According to a statement from CBN on Saturday, Director of the Financial Markets Department, Dr. Omolara Duke emphasised the bank’s commitment to market integrity and operational transparency.
She explained that the bank’s latest intervention aligns with its broader objective of ensuring sufficient liquidity and supporting orderly market activities.
“In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity on Friday, April 4, 2025, with the provision of $197.71m through sales to Authorized Dealers. This measured step aligns with the Bank’s broader objective of fostering a stable, transparent, and efficient foreign exchange market,” she said.
This intervention comes at a time of significant volatility in global markets, influenced by factors such as rising import tariffs from the United States and a marked decline in crude oil prices.
She said the CBN remains vigilant over both domestic and international market conditions as it strives to maintain stability in Nigeria’s FX market.
In addition to global tariff impacts, crude oil, a key revenue source for Nigeria, has seen a sharp drop of over 12 per cent, settling at approximately $65.50 per barrel. This downturn has exerted pressure on oil-exporting nations like Nigeria, with significant implications for exchange rate dynamics and broader market sentiment.
Despite these challenges, the CBN expressed confidence in Nigeria’s foreign exchange framework, noting its capacity to adjust effectively to evolving economic conditions.
The CBN also reiterated its commitment to promoting transparency, urging all Authorized Dealers to adhere to the Nigeria FX Market Code, which upholds high standards in transactions and market practices.
However, the FX market continues to face pressure, with the naira closing at N1,600/$1 at the end of trading on April 4, 2025. This marks a 1.9 per cent depreciation from the previous day’s rate of N1,569/$1 and represents the weakest exchange rate recorded for the naira since December 2024. The CBN’s move comes as part of a broader effort to stabilize the market and prevent further depreciation.
The CBN’s intervention also highlights the challenges the country faces with declining FX reserves, which have been under strain due to foreign debt servicing and global economic shifts.
In the first quarter of 2025, Nigeria’s reserves fell by $2.57bn, largely driven by the financial demands of foreign debt obligations. However, the CBN remains optimistic about the outlook for Nigeria’s FX reserves, citing expected improvements from rising oil production and increased non-oil foreign exchange earnings.