The Nigerian naira strengthened further against the United States dollar and other major international currencies in the official foreign exchange market on Thursday, September 10, following fresh intervention by the Central Bank of Nigeria (CBN) aimed at improving dollar liquidity and easing pressure on the domestic currency.
The naira appreciated by N1.00, representing a 0.08 per cent gain, against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), closing at N1,328.22/$1 compared with N1,329.22/$1 recorded at the previous session.
The modest gain came against the backdrop of a significant injection of foreign exchange by the apex bank into the market, underscoring the CBN’s continuing efforts to stabilise the naira by improving dollar supply and moderating demand-driven volatility.
Market data indicated that the CBN injected approximately $151 million into the foreign exchange ecosystem during the session.
According to a market update by CardinalStone, the apex bank sold $151.0 million at exchange rates ranging between N1,322.71 and N1,331.50 per dollar.
The intervention is particularly significant because the naira had come under renewed pressure in the preceding trading session as demand for foreign exchange increased. By supplying additional dollars to the market, the CBN sought to improve liquidity and prevent the renewed demand pressure from translating into a sharper depreciation of the domestic currency.
The latest intervention also came at a time when Nigeria’s external reserves have strengthened considerably, providing the monetary authorities with a larger buffer with which to manage short-term pressures in the foreign exchange market.
Nigeria’s gross external reserves have risen to $54.283 billion, strengthening the country’s capacity to meet external obligations, support market liquidity and absorb potential shocks to the foreign exchange market.
Naira Also Gains Against Pound, Euro
The naira’s improvement was not limited to the dollar.
At the official market, the domestic currency gained N3.93 against the Pound Sterling, closing at N1,798.22/£1 compared with N1,802.15/£1 on Wednesday.
Against the euro, the naira appreciated by N7.28, moving from N1,548.27/€1 to N1,540.99/€1.
The broad-based gains suggest that the improvement in the naira’s performance was supported by developments in the official foreign exchange market rather than being restricted to movements in the dollar-naira pair.
However, the performance was less uniform across other market segments.
At the GTBank foreign exchange counter, the naira weakened by N10 against the dollar to N1,340/$1 from N1,330/$1 recorded the previous day.
The currency also remained unchanged in the parallel market, where the dollar traded at N1,375.
The difference between the official rate and rates in other market segments continues to reflect the varying supply and demand conditions across Nigeria’s foreign exchange ecosystem.
At N1,328.22/$1 in the official market and N1,375/$1 in the parallel market, the spread remained significant, although the latest official-market appreciation indicates that increased dollar liquidity is beginning to provide some support for the naira.
CBN Intervention Targets Market Stability
The latest CBN action highlights the importance of liquidity management in the government’s broader effort to achieve greater stability in the foreign exchange market.
The naira has experienced considerable volatility in recent years, driven by foreign exchange demand from importers, manufacturers, investors and other businesses, alongside movements in external reserves, crude oil earnings and foreign portfolio flows.
For businesses that depend heavily on imported raw materials, machinery and finished products, exchange-rate stability is particularly important because sharp movements in the naira can quickly translate into higher operating costs and, ultimately, increased prices for consumers.
The same applies to foreign investors, whose investment decisions are influenced not only by returns on Nigerian assets but also by their ability to access foreign exchange and repatriate funds.
By supplying dollars directly into the market, the CBN is therefore seeking to reduce the possibility of a liquidity squeeze translating into excessive volatility.
The $151 million intervention is also coming at a time when the country’s external reserve position has improved significantly. The $54.283 billion reserve level gives the monetary authorities greater room to respond to temporary market pressures without relying solely on administrative measures.
Nevertheless, sustained naira stability will depend on more than periodic interventions.
The durability of the current trend will ultimately be influenced by the supply of foreign exchange from oil and non-oil exports, foreign investment inflows, remittances, demand for imports and the overall confidence of market participants in Nigeria’s FX framework.
Global Dollar Conditions Add New Pressure
While the naira benefited from domestic dollar supply, developments in the international financial markets introduced fresh uncertainty for risk assets, including cryptocurrencies.
The cryptocurrency market weakened during the session after stronger-than-expected United States producer inflation pushed Treasury yields higher and increased concerns that the US Federal Reserve could maintain a tighter monetary stance.
US producer prices rose 5.4 per cent in August, according to the report, while the yield on 30-year US Treasury securities climbed to a 19-year high.
Higher Treasury yields can put pressure on riskier assets because they make government securities more attractive to investors while also increasing the cost of borrowing and maintaining leveraged positions.
The development therefore weighed on major cryptocurrencies during the session.
XRP declined by 2.9 per cent to $1.34, while Dogecoin fell 2.2 per cent to $0.0855. Solana dropped 2.1 per cent to $99.82, while Cardano lost 2.0 per cent to $0.2095.
Bitcoin, the world’s largest cryptocurrency by market capitalisation, fell 1.5 per cent to $77,255.53.
Binance Coin also declined by 0.8 per cent to $716.29, while Ethereum shed 0.4 per cent to $2,468.51. TRON slipped 0.3 per cent to $0.3398.
The dollar-pegged stablecoins, Tether and USD Coin, remained unchanged at $1.00 each.
CPI Data to Test Market Expectations
Attention in global financial markets has now shifted to the US Consumer Price Index (CPI), whose release is expected to provide further clues about the direction of monetary policy in the world’s largest economy.
A stronger-than-expected inflation reading could reinforce expectations of higher-for-longer US interest rates, potentially strengthening the dollar and putting additional pressure on emerging-market currencies and risk assets.
For Nigeria, such developments could have implications for capital flows and the cost of accessing international foreign exchange.
The naira’s latest performance therefore comes at a critical point. While the CBN’s intervention and stronger external reserves are providing immediate support, the ability of the currency to sustain its gains will depend on whether improved dollar liquidity can be matched by stronger underlying foreign exchange supply.
For now, however, the movement to N1,328.22/$1 in the official market represents another modest gain for the naira and signals that the CBN’s intervention is having an immediate stabilising effect on the
