Naira Holds Firm As CBN Tightens Market Oversight

The naira remained broadly stable at the close of trading as the Central Bank of Nigeria (CBN) intensified oversight of the foreign exchange market, reinforcing measures aimed at curbing volatility and restoring confidence among investors and businesses.

Traders reported that the local currency held its ground across key market segments, supported by sustained regulatory scrutiny and improved transparency in FX transactions. Market participants said the CBN’s continued engagement with banks, authorised dealers and other stakeholders helped moderate speculative pressures that had previously driven sharp intraday swings.

According to dealers, the apex bank maintained close monitoring of order flows and pricing behaviour, ensuring compliance with existing trading rules. The tighter supervision was complemented by prompt interventions where necessary, including guidance on settlement timelines and adherence to reporting standards. Analysts noted that these steps have reduced arbitrage opportunities and narrowed gaps between different market windows.

The stability comes amid broader reforms designed to deepen liquidity and align the exchange rate with underlying market fundamentals. Recent policy actions have focused on enforcing a willing-buyer, willing-seller framework, improving price discovery and discouraging round-tripping. Market operators said clearer rules and firmer enforcement have encouraged more orderly trading, even as demand pressures persist.

Importers and manufacturers welcomed the calmer market conditions, saying reduced volatility aids planning and cost management. “Predictability is critical for pricing and inventory decisions,” said a Lagos-based importer, adding that steadier FX conditions help firms avoid sudden cost spikes that can be passed on to consumers.

On the investment front, portfolio managers said the firmer tone of the naira reflects growing confidence that policy consistency will be maintained. While acknowledging lingering risks from global financial conditions and domestic inflation, they pointed to improved communication from the CBN as a positive signal. “The market is responding to clarity and enforcement,” one fund manager said.

READ ALSO: Tinubu Condoles Anthony Joshua Over Lagos–Ibadan Expressway Tragedy

The CBN has also continued collaboration with other regulators to strengthen compliance and curb illicit flows. Enhanced surveillance and data-sharing arrangements have been deployed to detect market abuse and ensure that FX allocations are used for legitimate trade and investment purposes. Officials say these efforts are crucial to protecting reserves and sustaining market stability.

Economists cautioned, however, that maintaining the naira’s stability will require sustained policy discipline and complementary fiscal measures. They stressed the importance of boosting non-oil export earnings, improving oil production and ensuring timely repatriation of export proceeds. Addressing structural bottlenecks, including logistics and power constraints, was also cited as essential to easing FX demand over the medium term.

Looking ahead, market participants expect the naira to remain range-bound if current oversight and liquidity conditions persist. Any significant shift, they said, would likely be driven by external shocks or changes in domestic macroeconomic indicators. For now, the prevailing view is that the CBN’s tighter market oversight has helped anchor expectations, providing a measure of stability that stakeholders hope can be sustained in the weeks ahead.