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By Chinwendu Obienyi
The Central Bank of Nigeria (CBN) intervened in the foreign exchange market with an estimated N537 million in November, helping to ease liquidity pressures as the naira closed the month at N1,447.95 per dollar at the official window.
Despite persistent volatility, the apex bank began the month with a $50 million intervention aimed at tempering demand pressures. However, this failed to prevent a slight weakening of the naira, which depreciated by 0.2 per cent to close at N1,441.89/$1.
The currency later rebounded, supported by rising non-oil export inflows, improved market confidence and an additional $50 million CBN intervention, appreciating by 0.5 per cent to settle at N1,435/$1. But renewed demand from corporates, seeking to leverage available liquidity to secure imports ahead of the festive season, soon intensified pressure on the currency.
This outweighed the bank’s $250 million intervention to deposit money banks, causing the naira to fall by 1.5 per cent to N1,457.38/$1.
In the final week of November, the naira regained ground, appreciating by 0.7 per cent to close at N1,447.95/$1, buoyed by a robust $186.6 million injection from the CBN as well as inflows from offshore market participants. The additional liquidity helped offset strong domestic demand, providing short-term stability.
Overall, the CBN injected $536.6 million into the FX market in November. On the other hand, the naira ended November on a slightly weaker note, extending the volatility that has characterised the foreign exchange market in recent months.
The currency traded at N1,447.95/$1 on November 28, compared to N1,438/$1 at the start of the month. This reflects a mild depreciation from N1,427.5/$1 recorded on October 31, underscoring the fragile stability of the market despite aggressive monetary tightening by the apex bank.
In a move aimed at improving confidence and transparency, the CBN last week announced that it is finalising a revised foreign exchange (FX) manual, which will soon be released. Governor Olayemi Cardoso disclosed this at the annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
According to him, the revised manual will introduce clearer rules, strengthen documentation requirements, expand market participation, and enhance surveillance across the electronic FX management system, part of broader reforms targeted at stabilising the naira and deepening the FX market.
Commenting on the performance of the local currency, analysts remained optimistic, stating that the naira could close the year at N1,458/$1. They however remained pessimistic of short-term volatility, adding that as the festive season and import demand pick up, plus ongoing global uncertainties, the naira could come under fresh pressure without sustained interventions.
“While the risks remain evident, we now again lower our year-end FX forecasts. We see the naira at N1,458.8 against the dollar by this year-end and N1,473.0/$1 by December 2026”, analysts at Standard Bank said.
