Nigeria’s naira closed July stronger at ₦1,368 per dollar, compared to ₦1,376 at end of June, showing signs of stability in the foreign exchange market.
However, the average rate for the month weakened to ₦1,373.43 per dollar from ₦1,368.14 in June, a 0.4% decline. This suggests underlying pressure remained despite the month-end gain.
For businesses and investors, the difference matters. A strong close at month-end is positive, but lasting stability depends on whether supply can meet demand without heavy support from the Central Bank of Nigeria.
Why CBN Intervention Rose To $1.4bn
Data from FMDQ showed the CBN sold about $1.4 billion in July, its highest monthly sale since April 2025 when it also sold $1.4 billion.
The sale shows the apex bank’s effort to keep liquidity in the official market and reduce volatility.
It also shows the challenge facing monetary authorities: keep the market liquid while preserving stability.
The intervention came at a time offshore inflows were low. Foreign portfolio investors have stayed cautious due to global uncertainty and tighter risk controls.
For Nigeria, fewer offshore dollars mean local demand for dollars competes for limited supply. The CBN’s sale therefore filled the gap between supply and demand.
However, it raises a question about how long stability can last if such large intervention is needed.
The Central Bank of Nigeria (CBN) has introduced several FX changes since 2023, including unifying exchange rates and clearing backlogs, to restore confidence.
Reserves Provide Cover But Parallel Market Weakens
The outlook is supported by external reserves. Nigeria’s reserves stood above $39 billion in July, giving CBN room to intervene.
Stronger oil prices and improved export earnings should also help dollar supply.
This is better than periods when dollar scarcity led to sharp swings and a wide gap between official and parallel markets.
However, the parallel market gave a warning sign. The naira weakened to ₦1,415 per dollar at end of July, from ₦1,405 in June. That is a ₦10 loss, compared to ₦8 gain in official market.
While parallel market does not set official rate, it shows sentiment of those unable to get dollars from formal channels.
A sustained gap could affect pricing decisions for businesses and influence expectations, as reported by another online media, BusinessDay.
Analysts expect seasonal demand to rise as businesses prepare for end-year imports, which could add more pressure.
Therefore, July’s numbers show progress, but demand for dollars remains strong enough to require substantial CBN support, according to FMDQ data on FMDQ Group.
