Traders Crash Naira, Sell Dollar At New Exchange Rate As CBN Fights Back
- The CBN is ready to defend the naira as it faces pressure in the official and unofficial foreign exchange markets
- To halt naira depreciation, the CBN has decided to intervene to ensure that the naira does not depreciate further
- The CBN stated that its decision to intervene aims to foster a stable, transparent, and efficient foreign exchange market
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
To stabilise the depreciation of the naira in the official and unofficial foreign exchange markets the Central Bank of Nigeria (CBN) has pumped $197.71 million to authorised dealers.
The intervention comes as the naira has suffered a sharp decline, dropping 2.3% over just three days.
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The CBN’s decision to step in marks its first intervention of 2025 and this may continue if market conditions continue to deteriorate.
The CBN’s intervention, announced in a statement by Omolara Omotunde Duke, director of the bank’s financial markets department, is aimed at improving liquidity and maintaining stability in the market.
Part of the statement reads:
"In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity on Friday, April 4, 2025, by providing US$197.71 million 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."
Naira falls against the US dollar
Legit.ng earlier reported that the naira weakened by N35.77 at the official Nigerian Foreign Exchange Market (NFEM) between April 2 and 4, closing at N1,567.02 per dollar compared to N1,531.25 on April 2, according to CBN data.
In the parallel market, the naira also faced heavy losses, dropping to N1,565, a N15 decline from Wednesday’s rate.
Why naira is under pressure?
Analysts have attributed the naira’s struggle to a combination of factors, including the global fallout from U.S. President Donald Trump’s recently imposed tariffs on imports from major economies, alongside plummeting oil prices.
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Analysts at Afrinvest Securities noted that the sharp depreciation of the naira coincided with the announcement of US tariffs, which have dampened global investor sentiment and further heightened the demand for foreign currency in Nigeria.
They caution that unless there is a significant uptick in oil prices or an influx of foreign capital, pressures on the naira are likely to persist in the near term.
Still, Afrinvest warned that even a rebound in oil prices might not be enough to shield Nigeria’s FX reserves or the naira, given underlying structural pressures.
Nigeria’s gross external reserves slipped 0.3 percent to $38.17 billion as of April 2, down from $38.30 billion on March 28, according to CBN data.
CBN finally addresses alleged N5,000, N10,000 notes
Legit.ng previously reported that the Central Bank of Nigeria dismissed the purported release of new N5,000 and N10,000 banknotes, calling it false.
The bank disclosed in a statement on X, saying the content was not from the apex bank.
The fake content had quoted one Ibrahim Tahir, CBN’s deputy governor, as saying the move was aimed at reducing cash-handling costs and providing Nigerians with more efficient means of conducting large transactions.
Proofreading by James Ojo, copy editor at Legit.ng.
