Naira holds steady at N1,602/$1 as CBN maintains stabilization drive

The Nigerian naira maintained stability at the official foreign exchange market on Wednesday, closing at N1,602 to the US dollar, the same rate recorded on Tuesday.

This marks a continued demonstration of the Central Bank of Nigeria’s (CBN) efforts to curb volatility in the foreign exchange market, as the country navigates persistent economic challenges and inflationary pressures.

Data from the CBN’s official website revealed that the naira had closed at N1,596/$1 on Monday, before marginally weakening to N1,602/$1 on Tuesday and holding steady at the same rate on Wednesday.

Intra-day trading data showed a narrow band of fluctuation, with the currency trading between a high of N1,603.5/$1 and a low of N1,580/$1 on Wednesday — a sign of subdued volatility in the official market.

By comparison, Tuesday’s trading saw the naira move between N1,602.02/$1 and N1,596.7/$1, underscoring the central bank’s success in maintaining a relatively stable range through targeted interventions.

The average exchange rate stood at N1,599.5/$1 on Wednesday, slightly below Tuesday’s average of N1,600.04/$1. Against other major global currencies, the naira recorded the following official market rates: British Pound Sterling: N2,129.66; Euro: N1,814.31; Swiss Franc: N1,938.44.

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In the parallel (black) market, the naira traded at N1,608/$1 on Wednesday, showing a marginal gain from N1,610/$1 on Tuesday, but slightly weaker than N1,605/$1 on Monday.

The N6 gap between the official and parallel market rates continues to raise concerns over lingering arbitrage opportunities and speculative trading that threaten to undermine FX market reforms.

Financial analysts and market watchers have pointed to the sustained divergence as a sign that deeper structural reforms may be needed to fully unify the exchange rate system.

In a separate move to enhance regional trade and monetary efficiency, the CBN has directed all banks operating in Nigeria to adopt the Pan-African Payment and Settlement System (PAPSS).

This initiative aims to facilitate smoother cross-border transactions and deepen intra-African trade, aligning with the goals of the African Continental Free Trade Area (AfCFTA).