CBN boosts FX market with $574m intervention in August

The Central Bank of Nigeria (CBN) sold $574 million in August 2025 to stabilise the foreign exchange market, marking a 76 percent increase from the $326 million sold in July.

The move came amid declining inflows from key sources, particularly foreign portfolio investors (FPIs).

Data from FMDQ Exchange shows total FX inflows fell by 12 percent month-on-month to $3.4 billion in August, compared with $3.8 billion in July.

The decline was driven mainly by a 35 percent drop in FPIs, which fell to $1.1 billion from $1.7 billion.

Despite the contraction, FPIs remained the largest source of FX liquidity, accounting for 86 percent of foreign inflows and 32 percent of total inflows.

Within the segment, fixed-income investments dominated with $951 million, while equity inflows stood at $139 million.

Foreign direct investment (FDI) flows remained weak, slipping further to $22 million from $49 million in July, underscoring persistent investor caution.

On the domestic front, inflows from non-bank corporates dropped 28 percent to $826 million, while receipts from exporters recorded a modest rise to $654 million, up from $583 million.

Analysts described export proceeds as a more stable source of FX and stressed the need to scale up non-oil exports to strengthen Nigeria’s external position.

FBNQuest analysts said that while short-term volatility persists, FX liquidity in 2025 shows improvement over the previous year, supported by the CBN’s interventions and efforts to expand export capacity.

Meanwhile, the naira depreciated by 0.7 percent at the official market on Wednesday, closing at N1,494.01/$1 compared to N1,484.13 the previous day.

The currency held steady in the parallel market at N1,525/$1, while GTBank quoted N1,515/$1 for international transactions.

Nigeria’s external reserves rose to $41.89 billion as of September 16, up 2.27 percent from $40.96 billion on August 18, reflecting gradual reserve accumulation despite FX market pressures.