Traders Crash Naira, Sell Dollar at New Exchange Rate as CBN Fights Back

Traders Crash Naira, Sell Dollar at New Exchange Rate as CBN Fights Back

  • The CBN is ready to defend the naira as it faces pressure in the official and unofficial foreign exchange markets
  • To halt naira depreciation, the CBN has decided to intervene to ensure that the naira does not depreciate further
  • The CBN stated that its decision to intervene aims to foster a stable, transparent, and efficient foreign exchange market

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

To stabilise the depreciation of the naira in the official and unofficial foreign exchange markets the Central Bank of Nigeria (CBN) has pumped $197.71 million to authorised dealers.

The intervention comes as the naira has suffered a sharp decline, dropping 2.3% over just three days.

New naira exchange rate gets support from Olayemi Cardoso-led Central Bank of Nigeria (CBN).
The Central Bank of Nigeria (CBN) led by Olayemi Cardoso intervenes to help the naira recover against the dollar. Photo credit: Bloomberg/contributor
Source: Getty Images

The CBN’s decision to step in marks its first intervention of 2025 and this may continue if market conditions continue to deteriorate.

Read also

Naira falls to new low after CBN spends millions of dollar to defend currency

The CBN’s intervention, announced in a statement by Omolara Omotunde Duke, director of the bank’s financial markets department, is aimed at improving liquidity and maintaining stability in the market.

Part of the statement reads:

"In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity on Friday, April 4, 2025, by providing US$197.71 million through sales to authorized dealers.
"This measured step aligns with the Bank’s broader objective of fostering a stable, transparent, and efficient foreign exchange market."
New naira to dollar exchange emerges as the Central Bank of Nigeria (CBN) led by Olayemi Cardoso takes action.
The naira depreciates against the US dollar in FX markets as the Central Bank of Nigeria (CBN) led by Olayemi Cardoso moves to strengthen the naira. Photo credit: Bloomberg/contributor
Source: Getty Images

Naira falls against the US dollar

Legit.ng earlier reported that the naira weakened by N35.77 at the official Nigerian Foreign Exchange Market (NFEM) between April 2 and 4, closing at N1,567.02 per dollar compared to N1,531.25 on April 2, according to CBN data.

In the parallel market, the naira also faced heavy losses, dropping to N1,565, a N15 decline from Wednesday’s rate.

Read also

Exchange rate windows drift further apart as naira hits N1,600/$, CBN sells $197.71m to dealers

Why naira is under pressure?

Analysts have attributed the naira’s struggle to a combination of factors, including the global fallout from U.S. President Donald Trump’s recently imposed tariffs on imports from major economies, alongside plummeting oil prices.

Analysts at Afrinvest Securities noted that the sharp depreciation of the naira coincided with the announcement of US tariffs, which have dampened global investor sentiment and further heightened the demand for foreign currency in Nigeria.

They caution that unless there is a significant uptick in oil prices or an influx of foreign capital, pressures on the naira are likely to persist in the near term.

Still, Afrinvest warned that even a rebound in oil prices might not be enough to shield Nigeria’s FX reserves or the naira, given underlying structural pressures.

Nigeria’s gross external reserves slipped 0.3 percent to $38.17 billion as of April 2, down from $38.30 billion on March 28, according to CBN data.

Read also

CBN urgently releases $197 milion into forex market as US tariff causes tension

CBN finally addresses alleged N5,000, N10,000 notes

Legit.ng previously reported that the Central Bank of Nigeria dismissed the purported release of new N5,000 and N10,000 banknotes, calling it false.

The bank disclosed in a statement on X, saying the content was not from the apex bank.

The fake content had quoted one Ibrahim Tahir, CBN’s deputy governor, as saying the move was aimed at reducing cash-handling costs and providing Nigerians with more efficient means of conducting large transactions.

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Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

James Ojo avatar

James Ojo (Copyeditor) James Ojo is a copy editor at Legit.ng. He is an award-winning journalist with a speciality in investigative journalism. He is a fellow of Nigeria Health Watch Prevent Epidemics Journalism Fellowship (2023), WSCIJ Collaborative Media Project (2022), ICIR Health Reporting (2022), YouthHubAfrica’s Basic Education Media Fellowship (2022), Countering the Fake News Epidemic (MacArthur Foundation) 2021, and Tiger Eye Foundation Fellowship. Email: james.ojo@corp.legit.ng