CBN intervenes in FX market, withdrawing $190M to slow naira appreciation. Nigeria’s external reserves hit $50B, fueling investor caution amid volatility

The Central Bank of Nigeria (CBN) moved to slow the naira’s recent surge by withdrawing $190 million from the foreign exchange market. Analysts warn the rapid appreciation may unsettle foreign investors despite a stronger currency.

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The naira had gained over three per cent within days at the official window before retreating in the final sessions ending February 20.

Following the CBN’s intervention, the naira fell to ₦1,355.37 per dollar on February 24, down from ₦1,349.24 the previous day, as demand exceeded limited dollar supply.

Financial analyst Osas Igho noted, “Foreign investors are uneasy in a market with a strong currency. The naira’s aggressive rally could narrow profit margins and reduce carry trade attractiveness.” He added that a moderately weaker currency is often preferred to enhance returns on offshore investments.

Meanwhile, CBN Governor Olayemi Cardoso revealed that Nigeria’s external reserves surpassed $50 billion, sufficient to cover 9.68 months of imports, marking the strongest external buffer in years. The apex bank aims to push reserves to their highest level in 15 years.

The CBN’s intervention comes amid expectations for improved crude oil earnings, rising remittances, and foreign portfolio inflows.

Market participants are closely watching whether the bank will continue active interventions or allow the naira to stabilize naturally.

The narrowing of the gap between official and parallel FX markets—from ₦92 to ₦65—also signals renewed convergence, aided by CBN’s reopening of dollar sales to Bureau De Change operators.

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As Nigeria balances currency stability with competitiveness, investor sentiment will be critical in shaping the outlook for the remainder of 2026.