How CBN is Trying to Steady the Market as Naira Falls Again

The naira has had a turbulent ride over the past week, swinging between gains and losses as the Central Bank of Nigeria (CBN) continues its efforts to steady the foreign exchange market. 

Despite a slight improvement in the official market, the local currency is still feeling the heat, especially on the streets, where the parallel market paints a different picture.

At the heart of this instability is a deep-rooted issue: demand for the dollar continues to outpace supply. This pressure has left the CBN with no choice but to step up its intervention game. 

In recent days, the apex bank rolled out another round of foreign exchange operations, hoping to ease concerns about liquidity and reassure the market that it is actively working to close the gap between the official and unofficial rates.

According to figures reported last week, the naira appreciated marginally in the official window, moving from ₦1,603.78/$ to ₦1,599.94/$, a 0.24% gain. But while that looked like progress, the parallel market told a different story, where the naira weakened by nearly 5%, settling around ₦1,610/$ by week’s end. 

The wide gap between both markets reflects how much pressure still exists, particularly among importers and informal traders who struggle to access official forex sources.

Analysts at Cowry Asset Management say the CBN is sticking with its “weekly FX defence” strategy essentially, short-term interventions to stabilise the exchange rate. 

These include selling dollars directly to authorised dealers and stepping up communication around policy moves. Last week, the CBN sold $150 million at varying rates to help meet demand and ease panic.

CBN Governor Olayemi Cardoso remains publicly committed to seeing through reforms aimed at rebuilding market confidence. 

Speaking recently at the Nasdaq MarketSite in New York, he highlighted how the institution inherited a system plagued by trust issues and how his administration has taken a new approach, based on transparency and consistency.

Meanwhile, experts at Meristem Research believe that Nigeria’s recent agreement with South Africa could spark fresh investments and help boost the country’s foreign reserves in the long run. This kind of international cooperation might not bring overnight relief, but it could be a step in the right direction as the government looks to improve foreign capital inflow and strengthen the naira over time.

Still, despite all these efforts, it’s clear that stabilising the naira will take more than just weekly FX injections. As Nigeria navigates economic uncertainties and inflationary pressures, the road to true market stability will depend on long-term strategies — not just quick fixes. For now, all eyes remain on the CBN as it tries to hold the line.