CBN Sells $81 Million to BDCs as Naira Trades Flat in Official Window
In a decisive effort to stabilize the naira amidst mounting pressure in the foreign exchange market, the Central Bank of Nigeria (CBN) recently sold approximately $81 million to authorized Bureau De Change (BDC) operators. This strategic intervention underscores the central bank’s ongoing commitment to achieving equilibrium in the currency market.
Despite the currency’s slight depreciation by 0.4% week-on-week, closing at ₦1,538.00 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM), there is a silver lining with Nigeria’s foreign reserves climbing for the third consecutive week. As of July 24, 2025, the reserves bolstered by rising oil receipts and foreign capital inflows, increased by $778.34 million, reaching a notable $38.63 billion – one of the highest levels seen in recent months.
This upward trend in reserves is anticipated to boost investor confidence in the near future. In contrast to the spot market’s slight depreciation, the forward currency market showcased a more optimistic scenario. Across various tenors, modest gains were recorded: the 1-month forward increased by 0.2% to ₦1,576.21 per dollar, the 3-month by 0.4%, the 6-month by 0.3%, and the 1-year closed at ₦1,966.40 per dollar, also up by 0.3%. These gains are indicative of market optimism, driven by enhanced foreign exchange liquidity and persistent investor inflows.
Industry analysts and traders have attributed the positive outlook to the recent series of reforms and regular interventions by the CBN. A Lagos-based fixed-income analyst noted, “With reserves trending upward and naira yields remaining attractive, we expect relative stability in the near term.” Such sentiments were echoed by Cordros Research who pointed out “robust FX liquidity and sustained inflows” as pivotal factors driving the confidence in the market.
The naira’s high yields remain a magnet for both domestic and foreign investors, further strengthened by ongoing reforms aimed at increasing market transparency. As the market continues to adapt to these new realities, stakeholders are hopeful for more organized price discovery processes and fewer unpredictable fluctuations in the exchange rate.
Meanwhile, in the local debt market, the Debt Management Office (DMO) is preparing to raise ₦100 billion via reopened APR-2029 and JUN-2032 Federal Government bonds, amidst bullish activity as investors reinvest their bond coupons. Analysts suggest substantial bond demand, predicting that yields may soften due to strong domestic interest and cautious monetary expectations.
The secondary bond market mirrored this favorable sentiment, with average yields decreasing by 29 basis points to 16.3%. There were declines observed across short, mid, and long-term bonds, particularly in the APR-2029 (-48bps), APR-2032 (-69bps), and MAR-2036 (-40bps) bonds. Dealers believe that the current demand-supply dynamics and a stable policy outlook will likely perpetuate this momentum.
In related developments, it has been reported that the naira appreciated against the US dollar at the Nigerian Foreign Exchange Market (NFEM), fueled by a surge in foreign reserves and improved market sentiment. Official data from the CBN indicated that the naira traded at ₦1,534.78 per dollar on a recent Thursday, stronger than the ₦1,535.61 registered the previous day. This marks a rebound from a brief two-day slump, indicating renewed stability in the exchange market.
