The Central Bank of Nigeria (CBN) injected $4.1 billion into the foreign exchange market in the first half of 2025, marking a 215% increase from the $1.3 billion it supplied during the same period in 2024. The move, aimed at stabilising the naira and easing liquidity pressures, was disclosed in CSL Stockbrokers’ H2 2025 Outlook.
The naira opened the year at ₦1,535/$ and strengthened slightly to ₦1,530/$ by the end of June, reflecting a year-to-date gain of 0.4%. CSL attributed the relative stability to the CBN’s heavy interventions, particularly in April, when the naira briefly fell to ₦1,630/$ due to investor risk aversion following new U.S. trade tariffs.
Despite these efforts, analysts have raised concerns over the sustainability of the intervention strategy, pointing to declining oil earnings, weak foreign portfolio inflows, and limited external financing options.
Oil exports, which comprised 86% of Nigeria’s total exports in 2024, are projected to fall by 20% this year to $36.4 billion due to lower prices and production cuts. While foreign participation in Nigeria’s equity market rose to 29% in May, up from 20% in 2024, outflows continued to exceed inflows, signaling persistent investor caution.
CSL projects that the CBN may cut interest rates by up to 150 basis points in Q4 2025 as inflation eases, potentially weakening the naira by reducing the appeal of naira assets. However, improvements in Nigeria’s credit ratings and efforts to rejoin key global bond indices could attract renewed capital inflows.
Using models such as Purchasing Power Parity and Interest Rate Parity, CSL estimates the naira’s fair value at ₦1,647/$, but cautions that actual performance depends on stronger FX inflows.
Nigeria’s external reserves dropped by $3.67 billion in H1 2025 to $37.21 billion, reversing gains recorded in the same period in 2024. The decline is attributed to CBN interventions, external debt repayments, and reduced inflows from oil and remittances.
Analysts agree that Nigeria’s managed float system still requires regulatory support. Economist Adewale Abimbola noted that while FX demand has softened due to rising domestic refining, the CBN’s role remains critical to market stability.
The naira recently rose to a four-month high of ₦1,518/$, supported by renewed CBN interventions, FX reforms, and stable oil revenues. Market analysts expect the naira to trade within the ₦1,515–₦1,535/$ range in the near term.
