Nigeria CBN Injects $122M into Forex Market: Experts Predict Naira Rebound

The Central Bank of Nigeria (CBN) sold $122.67 million to forex dealers, aiming to stabilize the naira. Experts predict this will strengthen the currency and reduce market pressure. Despite the intervention, the naira slightly weakened against the dollar. The CBN commits to continued market stabilization efforts, emphasizing trade-backed transactions for forex purchases.

The Nigerian naira is expected to strengthen in the coming weeks following the Central Bank of Nigeria's (CBN) recent intervention in the foreign exchange market. On Friday, the CBN sold $122.67 million to 46 authorized dealers to stabilize the market and reduce volatility.

Experts believe this move will alleviate demand pressure on the forex market by increasing liquidity and potentially strengthening the naira. Muda Yusuf, CEO of the Promotion of Private Enterprise, commented that the naira's stability is dependent on supply and demand dynamics. He emphasized the importance of consistent interventions to build confidence and discourage speculation against the naira.

Ayodele Akinwunmi, a senior relationship manager at FSDH Merchant Bank, predicted a positive impact on the naira's value in the coming weeks. He stressed that sustained supply to the market, rather than one-off interventions, would likely lead to a continued appreciation of the naira.

Despite the intervention, the naira closed the week with a slight loss against the dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM). The dollar was quoted at N1,563.80 on Friday, compared to N1,554.65 on Thursday. The volume of dollars traded also decreased significantly from Thursday to Friday.

In the parallel market, often referred to as the black market, the naira closed at N1,560, showing a marginal loss compared to Thursday's rate.

The CBN's statement, signed by Omolara Duke, director of financial markets, detailed the forex sales over two days. It emphasized that the foreign exchange purchases from the CBN should be used exclusively for trade-backed transactions and reported within 72 hours.