In a significant move to stabilize the Naira and mitigate the effects of the US tariff and oil price drop, the Central Bank of Nigeria (CBN) has intervened with a $197.71 million injection into the foreign exchange market. This move is aimed at boosting the Naira’s value and maintaining economic stability
The Naira has been under pressure in recent months. This is due to a combination of factors, including the US tariff. Additionally, the oil price drop has contributed to the pressure. The US-China trade war has led to a decline in global oil demand. This has resulted in a significant drop in oil prices. This has had a ripple effect on the Nigerian economy, which is heavily reliant on oil exports. CBN intervenes with $197.71m to support Naira.
Crude oil prices have plummeted over 12% to around $65.50 per barrel due to sweeping trade tariffs imposed by President Donald Trump on several countries, including Canada, China, and Mexico.
Oil had traded above $70 per barrel before the tariffs were announced. According to OPEC Secretariat calculations, the price of the OPEC basket of twelve crudes stood at $75.35 per barrel on Thursday, compared to $77.44 the previous day. Nigeria relies on crude oil exports for 90% of its foreign exchange.
The CBN’s intervention is part of its efforts to maintain economic stability and boost investor confidence. The $197.71 million injection is expected to increase liquidity in the foreign exchange market and support the Naira’s value.
The CBN’s intervention is expected to have a positive impact on the economy, including:
– Stabilizing the Naira: The injection of $197.71 million is expected to boost the Naira’s value and reduce volatility in the foreign exchange market.
– Increasing Investor Confidence: The CBN’s intervention is seen as a positive step towards maintaining economic stability and boosting investor confidence.
– Supporting Economic Growth: The injection of funds is expected to support economic growth by increasing liquidity in the foreign exchange market and facilitating trade.
The CBN’s intervention with $197.71 million is a positive step towards maintaining economic stability and boosting investor confidence. The injection of funds is expected to stabilize the Naira, increase liquidity in the foreign exchange market, and support economic growth.