The Nigerian naira rallied to a four-month high against the US dollar, buoyed by a Central Bank of Nigeria (CBN) intervention that injected $50 million into the official forex market last week.
According to the CBN’s official rate window, the naira closed at ₦1,518.88 per dollar, reflecting renewed liquidity and easing pressure on foreign exchange demand.
The intervention followed a spike in corporate dollar demand that outpaced market supply, prompting the CBN to sell FX to authorized dealers on Thursday and Friday. The move signaled the apex bank’s readiness to stabilize the forex market and ensure orderly dollar access for legitimate transactions.
Nigeria’s external reserves also rose to $37.432 billion, bolstering market confidence in the country’s ability to meet external obligations. Also, several major Nigerian banks, including UBA, FirstBank, GTBank, and Wema Bank, have reinstated international transactions on naira-funded debit cards after a three-year suspension.
This resumption, enabled by improved dollar liquidity, marks a return to normalcy for Nigerian consumers and businesses reliant on global payments. Previously, naira cards had been restricted from foreign transactions due to chronic FX shortages, forcing reliance on domiciliary accounts and dollar-funded cards.
The foreign exchange outlook is further supported by an uptick in Nigeria’s crude oil production, which averaged 1.547 million barrels per day (bpd) in June, its highest output since January. This increase strengthens the country’s FX inflows and fiscal position, improving naira sentiment in the medium term.
Globally, U.S. inflation accelerated to 2.7% in June, up from 2.4% in May, amid rising prices of imported goods due to tariffs under President Trump’s trade policy. As a result, expectations for a 2025 Federal Reserve rate cut have cooled, with the Fed likely to maintain its benchmark interest rate at 4.25%-4.50% during its July meeting.
However, markets are speculating that a change in Fed leadership, given Trump’s criticism of the current chair, could introduce a more dovish stance, potentially triggering fresh dollar volatility. As these global and domestic factors converge, the naira could soon test the critical ₦1,500/$ threshold.
