CBN Urgently Releases $197 Milion Into Forex Market as US Tariff Causes Tension

• The Central Bank of Nigeria made a US$197.71 million investment in the foreign exchange (FX) market
• The transfer was done through sales to authorised dealers, according to the director of the Financial Markets Department at CBN
• Omolara Duke said the measure was a response to the increasing volatility of global financial markets

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

To maintain sufficient liquidity and stabilise trading, the Central Bank of Nigeria (CBN) invested US$197.71 million in the foreign currency (FX) market on Friday, April 4.

The CBN director of the Financial Markets Department, Omolara Duke, stated in a weekend circular that the transfer was made through sales to authorised dealers.

The action, according to Duke, addressed the growing volatility in international financial markets. This came after the United States slapped fresh import duties on a number of economies.

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“The Central Bank of Nigeria (CBN) has noted recent movements in the foreign exchange market between April 3 and 4, 2025, reflecting broader global macroeconomic shifts currently affecting several Emerging Market and Developing Economies,” the circular stated.

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 US$65.50 per barrel, putting further strain on countries that export oil, such as Nigeria.

“These developments were as a result of the recent announcement of new import tariffs by the United States government on imports from several economies, which has triggered a period of adjustment across global markets,” the document noted.

How CBN is providing solution

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,” it said.

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The bank emphasized that this action advances its objective of having a stable, open, and effective foreign exchange market.

The CBN also said it is confident in Nigeria's foreign exchange system.

“This measured step aligns with the Bank’s broader objective of fostering a stable, transparent, and efficient foreign exchange market. The CBN continues to monitor global and domestic market conditions and remains confident in the resilience of Nigeria’s foreign exchange framework, which is designed to adjust appropriately to evolving fundamentals,” the circular added.

The bank also asked authorised dealers to maintain high standards with customers and market partners and to adhere closely to the Nigeria FX Market Code.

CBN reports highest net FX reserves in 3 years

Legit.ng reported that the Central Bank of Nigeria (CBN) reported on Tuesday, April 1, 2025, that it achieved an improvement in its net FX reserve (NFER) at $23.11 billion in 2024.

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According to a statement from the apex bank, the NFER amount was the highest level of FX accruals in three years, relative to $3.99 billion in 2023, $8.19 billion in 2022, and $14.59 billion in 2021.

The earnings show an improvement in Nigeria’s external liquidity, reduced short-term obligations, and increased investor confidence.

Proofreading by Nkem Ikeke, copy editor at Legit.ng.

Source: Legit.ng