CBN Mops Up $190 Million to Slow Rapid Naira Appreciation

The Central Bank of Nigeria (CBN) last week intervened in the foreign exchange (forex) market, buying about $189.8 million to slow the rapid appreciation of the Nigerian naira at the official window. Analysts say the move aims to absorb excess US dollar supply, stabilise the currency, and prevent market disruptions that could affect investors and the broader economy.

The naira had strengthened sharply in recent weeks, closing at around ₦1,346.32/$ in the official market — a week-on-week gain of ₦9.09. The parallel market also recorded gains, with rates improving by ₦60 to about ₦1,340/$. As a result, the FX spread — the difference between official and parallel rates — narrowed significantly to 0.47% from 3.29% the previous week, signalling improved convergence between the markets.

TrustBanc Financial Group noted that the naira’s successive rally could have prompted foreign investors to exit the fixed-income market, selling their holdings to repatriate profits. This scenario could have triggered higher US dollar demand, putting additional pressure on the naira and weakening market stability.

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Normally, central banks sell dollars to support the currency, but the CBN reversed this trend for the first time in months, buying dollars to moderate gains and prevent speculative surges. Analysts said this measured intervention reflects the bank’s commitment to exchange rate stability and orderly FX market operations.

On the macroeconomic front, Nigeria’s external reserves have remained robust, surpassing $46 billion, supporting the CBN’s ability to manage market dynamics. Strong oil prices, rising reserves, and reform-driven FX inflows have contributed to the naira’s stability, even amid lingering geopolitical risks.

Economists warn that excessive naira appreciation could reduce the competitiveness of Nigerian exports and prompt capital flight, affecting domestic investment. By moderating gains, the CBN seeks to balance currency stability, investor confidence, and the nation’s economic fundamentals.

Investors and businesses are being urged to monitor the FX market closely, as central bank interventions may influence short-term forex availability and pricing. Analysts expect the CBN to continue careful market management while promoting long-term currency stability.

CBN Mops Up $190 Million to Slow Rapid Naira Appreciation

Dangote Opens Refinery Investment to Nigerians With Public Share Sale Plans

Aliko Dangote, President of the Dangote Group, has announced that ordinary Nigerians will soon be able to buy shares in the $20 billion Dangote Petroleum Refinery, a move aimed at expanding public participation in one of Africa’s largest industrial projects. The announcement was made during a guided inspection of the refinery by NNPC Limited management, led by Group CEO Bayo Ojulari, and senior officials of the company.

Dangote stated that arrangements are being finalised to allow individual investors to acquire shares within the next four to five months, giving Nigerians direct ownership in the refinery. “Individually, Nigerians too will have an opportunity… in the next maximum four or five months, they will actually be able to buy their shares,” he said.

The Nigerian National Petroleum Company (NNPC) currently holds a 7.25 % stake in the refinery on behalf of Nigerians, ensuring that public interest remains a key aspect of the project. Dangote further explained that investors will have flexibility in receiving returns, saying, “People will have a choice either to get their dividends in naira or to get their dividends in dollars because we earn dollars.”

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Beyond the public share offering, Dangote highlighted ongoing collaboration with NNPC to enhance operations and explore opportunities across the oil and gas value chain, including potential upstream partnerships. “Most likely… we will partner with them, maybe in some of the upstream. They, too, will partner with us here because here is not a refinery. It’s an industrial hub,” he said.

The refinery is also set to support additional industrial ventures, including the production of linear alkylbenzene (LAB), a key raw material for detergents. Dangote noted that production will be sufficient to meet demand across the African continent within 30 months, underscoring the facility’s industrial significance.

Industry analysts expect the refinery to list on the Nigerian Exchange (NGX) through a phased public offering of 5–10 % equity, similar to earlier listings of Dangote Cement and Dangote Sugar. The move is aimed at enhancing market liquidity, transparency, and public participation, while retaining majority ownership by the Dangote Group.

The public share offering represents a milestone in Nigeria’s industrial and energy sector, offering citizens an opportunity to participate in a globally competitive infrastructure project while benefiting from dividends in local and foreign currency.

Dangote Opens Refinery Investment to Nigerians With Public Share Sale Plans

CBN Policies, Foreign Inflows Drive Naira to Two-Year Peak

Nigeria’s naira has extended its recent rally, trading at one of its strongest levels against the U.S. dollar in nearly two years, supported by sustained foreign portfolio inflows, tighter liquidity management, and targeted policy interventions by the monetary authorities.

A macroeconomic update by CardinalStone shows that the local currency has appreciated 6.9 per cent year-to-date at the official foreign exchange market, closing at ₦1,347.78/$—its strongest performance since early 2024. The appreciation reflects improved FX liquidity and growing confidence in the official trading window.

Despite the gains, a gap persists between the official and parallel markets. However, the premium narrowed from about 5.7 per cent to roughly 3.2 per cent following renewed foreign exchange interventions by the Central Bank of Nigeria. According to CardinalStone, the compression of the spread indicates stronger liquidity conditions in the official market, reducing incentives for speculative trading and arbitrage.

As part of efforts to further stabilise the FX market, the CBN recently authorised licensed Bureau de Change (BDC) operators to access foreign exchange from approved dealers at prevailing market rates, subject to a weekly cap of $150,000 per BDC and strict Know-Your-Customer (KYC) requirements. Under the framework, operators must sell unused FX balances within 24 hours, limit cash transactions to 25 per cent of total trades, and settle transactions through licensed financial institutions.

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With 82 licensed BDCs currently operating, CardinalStone estimates that potential FX supply to the segment could rise to about $50 million monthly. Although this remains significantly below pre-pandemic levels, the renewed supply has helped ease retail FX demand pressures and compress the premium in the parallel market.

While foreign inflows have strengthened the naira, analysts caution that continued appreciation could prompt profit-taking by offshore investors. CardinalStone estimates outstanding foreign portfolio investment (FPI) exposure at between $12 billion and $14 billion, noting that Nigeria’s carry trade remains one of the most attractive across emerging and frontier markets.

The firm added that assuming many investors entered the market at around ₦1,500/$, a move toward ₦1,200–₦1,250/$ could deliver over 22 per cent FX gains on currency alone. Such gains could heighten the risk of portfolio rebalancing or exits, particularly as political and election-related uncertainties begin to build.

Ahead of the latest meeting of the Monetary Policy Committee, analysts describe the macroeconomic signals facing policymakers as mixed. Inflation has started to moderate, while short-term interest rates have converged near 22 per cent, about 500 basis points below the 27 per cent Monetary Policy Rate (MPR).

However, the CBN has signalled low tolerance for excess liquidity, intensifying Open Market Operations (OMO) issuances and keeping the Standing Deposit Facility (SDF) attractive to absorb surplus funds and prevent renewed inflationary pressure. Analysts also point to concerns around election-related liquidity, which is expected to intensify in the second half of the year, with over 75 per cent of projected 2026 liquidity expected in the first half.

Looking ahead, CardinalStone expects the CBN to hold the policy rate while adjusting the asymmetric corridor to align SDF rates with OMO yields and preserve the attractiveness of naira assets for foreign investors. Forward market indicators suggest a softer currency path later in the year, with the naira projected to trade within a ₦1,350–₦1,450/$ range in 2026, despite the recent rally.

CBN Policies, Foreign Inflows Drive Naira to Two-Year Peak