The Traffic

CBN Defends Naira with US$4.7bn in First Half of 2025

The Central Bank of Nigeria (CBN) has spent approximately $4.7 billion defending the naira in the first half of 2025. This significant intervention aims to maintain stability in the foreign exchange market amid global economic uncertainties and capital outflows.

By Rhalialt Arhuoizah 

Key Highlights of CBN's Intervention:

- Total Intervention Amount: $4.7 billion
- Average Monthly Intervention: $786.58 million, notably lower than pre-COVID and post-COVID levels
- Reason for Intervention: To counter the effects of global economic shifts, including US trade policies and heightened geopolitical tensions, which led to offshore investors exiting positions and increased demand for US dollars
- Impact on External Reserves: Nigeria's external reserves declined to $38.31 billion by the end of the first quarter due to persistent dollar sales and debt service obligations
- Naira Performance: Despite interventions, the naira depreciated against the dollar, with notable fluctuations in the official and parallel markets

CBN's Strategy:

The CBN's intervention strategy involves discretionary interventions in the foreign exchange market to address perceived distortions. According to CardinalStone, the CBN's actions suggest a focus on maintaining stability rather than targeting a specific exchange rate .