The Central Bank of Nigeria (CBN) has once again stepped into the foreign exchange market, releasing $50 million to authorised dealer banks in an effort to calm the rising pressure on the naira. This fresh intervention comes at a time when demand for the US dollar has surged, putting the local currency under renewed strain.

This is not the first time the CBN is making such a move this year. In less than six months, the apex bank has repeated the same strategy—selling dollars to boost market liquidity and help stabilise the exchange rate. But despite these efforts, the naira continues to face intense volatility.

A Market Under Pressure

Throughout the week, the naira fluctuated sharply, trading between N1,447/$ and N1,460/$. These swings highlight how fragile the market still is, even after a brief period of stability earlier in the month. Reports show that demand for dollars has increased significantly, especially for international payments and imports, creating fresh pressure on the currency.

To ease this tension, the CBN sold $50 million to major dealer banks under its “willing buyer, willing seller” arrangement. This system allows banks and buyers to negotiate rates more freely while still receiving supply support from the apex bank.

Why the CBN is intervening again

Analysts had recently observed that the CBN seemed to be stepping back from aggressive interventions because the naira had been gaining some strength. But the latest jump in dollar demand has forced the bank to change course.

This is also not the first $50 million injection of the year. In June 2025, the CBN made a similar sale to banks like UBA, Access Bank and Zenith Bank when the naira was slipping after days of persistent decline. That move temporarily stabilised the market, but the effect did not last.

The CBN’s goal remains straightforward: increase the supply of dollars in the market so that demand does not overwhelm the system. When there’s more supply, the exchange rate tends to cool down.

Naira is constantly fluctuating

Even with the recent injection, the naira continues to experience what many describe as a “rise-and-fall” pattern. On Monday, the naira opened at N1,447.70/$, but by Wednesday, it had dipped to N1,455/$, after briefly hitting N1,460/$ during the day.

These constant fluctuations make it difficult for businesses and ordinary Nigerians to plan, especially those who rely on imported goods or international transactions.

Earlier predictions by financial analysts suggested that the naira could strengthen to N1,400–N1,450 per dollar before the end of the year. But with the currency still unstable and with the CBN needing to step in again, those forecasts may no longer hold.

Strong reserves, weak naira

Interestingly, the latest pressure on the naira is happening at a time when Nigeria’s foreign reserves are at a seven-year high. CBN Governor Yemi Cardoso recently announced that the reserves can now cover more than 10 months of imports, a sign of stronger economic footing.

He also explained that earlier gains in the naira were supported by better oil sales, improved market liquidity and new policies aimed at stabilising the currency. But despite these positives, the market remains highly sensitive to changes in demand for the dollar.

What happens next?

The new $50 million injection is expected to ease some of the immediate pressure, but whether it will bring lasting stability remains uncertain. The forex market in Nigeria is still heavily demand-driven, and any increase in dollar demand can quickly weaken the naira again.

For now, the CBN appears ready to continue applying short-term interventions while it works on longer-term reforms to strengthen the currency.