Exchange Rate Windows Drift Further Apart as Naira Hits N1,600/$, CBN Sells $197.71m to Dealers
- The Nigerian currency depreciated to its lowest in five months to N1,600 in the official Nigerian Foreign Exchange Market (NFEM)
- The naira’s depreciation in the official window further widened the gap between the official and parallel market windows
- Meanwhile, the Central Bank of Nigeria (CBN) intervened in the FX market with sales of $197.71 million to dealers
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The official and parallel market windows have drifted further apart as the naira hit a five-month low in the Nigerian Foreign Exchange Market (NFEM).
On Friday, April 4, 2025, the naira depreciated to N1,600 per dollar, down from N1,569 it traded the previous day.
Source: Getty Images
The naira hits a five-month low
The last time the naira traded near that rate was on December 3, 2024, when it exchanged at N1,608 per dollar.
The December depreciation came shortly after the Central Bank of Nigeria (CBN) newly launched the NFEM to boost transparency and liquidity.
The apex bank then mandated banks and currency dealers to migrate to the Bloomberg BMatch System to ensure transparency.
Experts say Friday’s naira depreciation was expected as the CBN prolonged its intervention in the forex markets.
CBN intervenes in the FX market
However, on Saturday, April 5, 2025, CBN intervened by releasing $197.71 million into the FX market to boost liquidity.
CBN Director of the Financial Markets Department, Omolara Duke, stated in a weekend circular that the transfer was conducted through sales to authorised dealers.
According to Duke, the action addressed the growing volatility in international financial markets.
This came after the United States slapped fresh import tariffs on several economies.
The CBN attributed these changes to the global market turbulence caused by U.S. tariffs.
Additionally, the price of crude oil fell more than 12% to roughly $65.50 per barrel, further straining countries that export oil, such as Nigeria.
On April 4, 2025, the CBN provided US$197.71 million to combat this.
“In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity on Friday, April 4, 2025, with the provision of US$197.71 million through sales to Authorised Dealers,” CBN said.
The bank emphasised that this action advances its objective of having a stable, open, and effective foreign exchange market.
The naira depreciates in the black market
Meanwhile, the naira also depreciated in the parallel market on Friday, April 4, 2025, trading at N1,565 from N1,560.
Source: Getty Images
Data from the CBN shows that dealers quoted the dollar at a high of N1,625 and a low of N1,519 on Friday, April 4, 2025.
Naira experiences biggest fall in 2025
Legit.ng earlier reported that the Nigerian naira hit its lowest in 30 days on Thursday, April 3, 2025, in the official Nigerian Foreign Exchange Market (NFEM).
CBN data shows that the naira depreciated to N1,569 per dollar from N1,534 the previous day.
The depreciation is the lowest the local currency has gone in over 30 days as analysts fear it might fall off the N1,500 ceiling against the dollar.
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Source: Legit.ng
