Key Points
- CBN sells $151 million into the foreign exchange market at rates between ₦1,322.71 and ₦1,331.50 per dollar
- Naira appreciates 0.45% at the official window to ₦1,328 per dollar
- CardinalStone reports the naira weakened 0.36% at the parallel market to ₦1,395 per dollar
The Central Bank of Nigeria (CBN) injected $151 million into the foreign exchange market on Thursday, supporting dollar supply as the naira recorded a marginal gain against the US dollar.
The CBN sold the $151 million at rates ranging from ₦1,322.71 to ₦1,331.50 per dollar, according to CardinalStone’s market update. The intervention came a day after the naira lost ₦9 against the dollar, indicating renewed central bank support for foreign exchange liquidity.
The naira closed at ₦1,328.21 per dollar, compared with ₦1,329.21 at the previous close, based on data from the CBN. CardinalStone said the currency appreciated 0.45% at the official window to about ₦1,328 per dollar.
The investment firm reported that the naira’s performance in September has been supported by foreign exchange inflows from foreign portfolio investors, exporters, importers and non-bank corporate sources, alongside intermittent intervention by the CBN.
However, the improvement at the official window was not replicated in the parallel market. CardinalStone reported a 0.36% depreciation to ₦1,395 per dollar.
The latest intervention adds to the CBN’s efforts to manage dollar supply and reduce pressure on the domestic currency. The scale and timing of the transaction also underline the importance of official liquidity support in the foreign exchange market when demand pressures intensify.
Analysts cited in the market update said Nigeria’s foreign reserves provide the CBN with a buffer to defend the naira and absorb external and domestic foreign exchange shocks.
What’s Being Said
CardinalStone reported that the CBN sold $151 million at rates between ₦1,322.71 and ₦1,331.50 per dollar, while the naira gained 0.45% at the official window but weakened 0.36% in the parallel market.
Analysts cited in the market update said Nigeria’s strong foreign reserves provide the monetary authority with capacity to defend the currency and absorb shocks.
What’s Next
The immediate focus will be on whether continued foreign exchange inflows and further CBN intervention can sustain the naira’s recent performance at the official market.
Market participants will also monitor the gap between the official and parallel-market exchange rates, alongside foreign portfolio, exporter and corporate dollar inflows.
Bottom Line
The Bottom Line: The CBN’s $151 million intervention is providing additional dollar liquidity at a time when the naira remains sensitive to changes in supply and demand. The divergence between official and parallel-market rates shows that intervention has improved conditions at the official window without eliminating broader currency-market pressure.
SOURCE: BizWatchNigeria.Ng
