CBN Sells $81 Million to BDCs as Naira Trades Flat in Official Window
- The Central Bank of Nigeria (CBN) has injected fresh forex into the market to stabilise the naira amid renewed volatility in the official window
- The apex bank’s dollar sales come as the naira traded flat in the Nigerian Foreign Exchange Market last week
- Analysts say the new rate is below the local currency’s value, hence the CBN’s intervention to steady the naira
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Central Bank of Nigeria (CBN) sold about $81 million to authorised Bureau De Change (BDC) operators last week in a fresh move to stabilise the naira amidst renewed pressure in the foreign exchange market.
The intervention came as the local currency weakened by 0.4% week-on-week, closing at ₦1,538.00/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Source: Getty Images
Forex reserves record fresh upward movement
This development signals the apex bank’s continued commitment to restoring balance in the currency market.
Despite the decline in the naira’s spot value, Nigeria’s foreign reserves rose for the third straight week, adding $778.34 million to reach $38.63 billion as of July 24, 2025.
This marks one of the highest reserve levels in months, supported by rising oil receipts and foreign capital inflows.
Analysts say the improving reserve position is likely to strengthen investor confidence going forward.
The forward market shows promising rebound signs
While the spot market saw slight depreciation, the forward currency market told a different story.
All tenors recorded modest gains: the 1-month forward rose by 0.2% to ₦1,576.21/$1, 3-month by 0.4%, 6-month by 0.3%, and 1-year by 0.3%, closing at ₦1,966.40/$1.
These gains indicate market optimism, driven by increased FX liquidity and sustained investor inflows.
Experts link stability to CBN’s reforms
Analysts and traders alike credited the CBN’s recent reforms and regular interventions for the improving outlook.
A Lagos-based fixed-income analyst said, “With reserves trending upward and naira yields remaining attractive, we expect relative stability in the near term.”
Cordros Research echoed similar sentiments, highlighting “robust FX liquidity and sustained inflows” as key drivers of market confidence.
Naira yields remain attractive to investors
According to a recent report by Daily Sun, the naira’s high yields have continued to attract both domestic and foreign investors.
This interest is further reinforced by ongoing reforms aimed at increasing market transparency.
As the market adjusts to new realities, stakeholders anticipate more orderly price discovery and fewer sharp fluctuations in the exchange rate.
FGN Bonds see surge in demand
In the local debt market, the Debt Management Office (DMO) is set to raise ₦100 billion through reopened APR-2029 and JUN-2032 Federal Government bonds.
This comes amid bullish activity, as investors reinvest their bond coupons.
Analysts say bond demand is high, and yields are likely to soften due to strong domestic interest and cautious monetary expectations.
Bond yields decline across all tenors
The secondary bond market reflected the upbeat sentiment, with average yields falling 29 basis points to 16.3%.
Source: Getty Images
Short, mid, and long segments all saw declines, led by the APR-2029 (-48bps), APR-2032 (-69bps), and MAR-2036 (-40bps) bonds.
Dealers say demand-supply dynamics and a stable policy outlook are likely to maintain this momentum.
Naira strengthens against the dollar
Legit.ng earlier reported that Nigeria’s local currency, the naira, appreciated against the US dollar at the Nigerian Foreign Exchange Market (NFEM), buoyed by a boost in foreign reserves and improved market sentiment.
According to official data from the Central Bank of Nigeria (CBN), the naira traded at ₦1,534.78 per dollar on Thursday, stronger than the ₦1,535.61 recorded the previous day.
This marks a reversal from a brief two-day slump, signalling renewed stability in the exchange market.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
