The Central Bank of Nigeria (CBN) has intensified its efforts to stabilize the exchange rate by injecting foreign currency into the official market to maintain liquidity. While this intervention provides short-term relief, the exchange rate remains sensitive to high demand pressures.
Under Governor Cardoso, the CBN continues to play a crucial role in the market despite reducing its forex interventions. With foreign reserves climbing to $40 billion, the CBN has a critical buffer to support its stabilization efforts. However, growing demand for dollars could strain these reserves. To bolster liquidity, the government has announced plans to issue dollar-denominated bonds, which may strengthen reserves and stabilize the market in the coming months.
Record-Breaking Forex Turnover
On Friday, November 8, Nigeria’s forex market experienced a historic surge in activity, recording the highest single-day trading volume ever. Turnover reached an unprecedented $1.403 billion, surpassing the previous high of $857 million set in March.
Naira Exchange Rate Trends
The naira ended Friday’s trading at N1,678/$1, holding steady at its all-time low from the previous day. Throughout the session, the exchange rate fluctuated between a high of N1,698/$1 and a low of N1,609/$1.
In the parallel market, the naira depreciated further, closing at N1,730/$1. This widening gap between the official and parallel rates highlights the increasing demand pressures on the naira.
Factors Driving the Surge in Forex Turnover
The record turnover was largely driven by heightened demand from businesses and investors seeking dollars urgently. Analysts suggest that concerns over the naira’s continued depreciation have prompted traders to purchase dollars preemptively, further pressuring the currency.
The increased turnover reflects both the CBN’s interventions and market-driven trades. Additionally, a significant rise in diaspora remittances—doubling to $600 million monthly—has contributed to the dollar supply, offering some relief to the market.
2024: A Tough Year for the Naira
High inflation and fiscal challenges have made 2024 particularly difficult for the naira. The currency has depreciated by 45%, making it one of the worst-performing currencies globally. Despite the CBN’s efforts to supply more forex, the persistent demand, especially from importers and businesses, has kept the naira under pressure.
To address this, the CBN has encouraged exporters to repatriate their earnings into the official market to boost dollar availability. Additionally, rising crude oil prices and foreign bond sales have positively impacted foreign reserves, providing further support for the naira.
Looking Ahead
While the CBN’s interventions and government strategies may offer temporary relief, sustained stabilization of the naira will depend on continuous dollar inflows and careful management of the foreign exchange market. High demand pressures remain a challenge, and long-term success will require structural reforms to address the underlying issues affecting the currency.

Discover more from DiutoCoinNews
Subscribe to get the latest posts sent to your email.