In a strategic effort to support Nigeria’s foreign exchange (FX) market, the Central Bank of Nigeria (CBN) has disbursed $197.71 million to authorized dealers, reinforcing its commitment to market stability and sufficient liquidity. The intervention took place on Friday, April 4, 2025, and was officially confirmed in a statement by Dr. Omolara Omotunde Duke, Director of the Financial Markets Department.
The central bank stated that the move was part of ongoing efforts to ensure an efficient and transparent FX system amid increasing global economic volatility.
“This measured step aligns with the Bank’s broader objective of fostering a stable, transparent, and efficient foreign exchange market,” the statement read.
Responding to Global Headwinds
This latest intervention comes amid turbulence in global markets, triggered in part by the reintroduction of import tariffs by the United States. The fallout has impacted multiple emerging markets, including Nigeria, where foreign exchange markets have come under pressure.
Compounding the challenge is a sharp decline in crude oil prices—Nigeria’s primary source of foreign revenue. Oil prices have dipped over 12% recently, hovering around $65.50 per barrel. This drop has intensified pressure on Nigeria’s FX reserves and impacted exchange rate stability.
Naira Under Pressure
The naira weakened further on April 4, closing at N1,600 per dollar, representing a 1.9% depreciation from the previous day’s closing rate of N1,569. This is the lowest level recorded since December 4, 2024, and marks a 3.9% decline in the local currency just in the first week of April.
Intra-day trading showed a wide fluctuation, with highs at N1,625 and lows at N1,519, highlighting the growing volatility in the market. The average exchange rate on the Nigerian Foreign Exchange Market (NFEM) closed at N1,567, also a new low for the year.
Market Integrity and Regulation
Despite the depreciation, the CBN reiterated confidence in the country’s FX framework, emphasizing its adaptability in responding to evolving economic fundamentals. It called on all authorized FX dealers to uphold the Nigeria FX Market Code, stressing the importance of integrity and transparency in all transactions.
The Bank’s renewed injection into the market is expected to help smoothen FX operations and ease the mounting pressure on the naira, even as global shocks continue to reverberate.
Looking Ahead
This move follows recent reports that the World Bank plans to offer a $10.5 million grant to strengthen the CBN’s technical capacity, highlighting growing international cooperation to help Nigeria navigate its economic challenges.
As the CBN monitors global and domestic developments, more interventions may be expected in the coming weeks to stabilize the market and restore investor confidence.
