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Naira Firms to N1,531 as CBN Injects $50m, Analysts Warn of Fragile Relief - THE DAILY TIMES
The naira strengthened at the official window on Friday, closing at N1,531 per dollar after the Central Bank of Nigeria (CBN) injected $50 million into authorised dealer banks to stem pressure from rising dollar demand.
The intervention came after the local currency slid close to N1,539 at the interbank market during the week, forcing the apex bank to act. At Friday’s session, the spot rate touched an intraday high of N1,534.50 before settling at N1,531, while in the parallel market, the naira closed at N1,540, leaving a narrow spread of N9.
Currency dealers said the CBN’s floating auctions have provided short-term relief, narrowing the gap between official and street rates to less than one per cent, compared with N50–N70 spreads recorded in previous months. However, analysts warned that the move only temporarily eases demand pressure without addressing structural weaknesses.
Nigeria’s external reserves, which rose to $41.27 billion on Friday following an inflow of $23.42 million, provide the CBN with a liquidity buffer. Yet, analysts cautioned that obligations such as import financing, portfolio outflows and speculative trading could quickly offset gains.
“Intervention is giving the market breathing space, but unless reserves keep rising and non-oil forex inflows improve, the naira will remain vulnerable. The risks are still tilted to the downside,” a Lagos-based analyst noted.
Market watchers also pointed to global oil prices as a critical factor. Brent crude hovered slightly above $68 per barrel on Friday, set for a second consecutive weekly gain of about one per cent. While this supports Nigeria’s reserves position, volatility in crude markets remains a risk to currency stability.
Heading into the weekend, analysts said businesses might take advantage of the firmer naira to settle obligations, but warned that if the CBN slows dollar supply next week, the spot rate could quickly drift back above N1,540. For now, market sentiment remains cautious, with speculative demand still exerting pressure despite the central bank’s intervention.
