CBN Initiates Measures to Enhance Foreign Exchange Supply
The naira experienced a noteworthy weekly decline, depreciating by N21.68 against the US dollar on the official foreign exchange market, despite posting modest gains on certain days. This decline comes as Nigeria’s foreign exchange reserves continue to dwindle.
Latest data from the Central Bank of Nigeria (CBN) indicates that the naira closed at 1,380.58 naira to the dollar on Friday, marking a 1.57% decrease from the 1,358.90 naira recorded the previous Friday at the Nigerian Foreign Exchange Market (NFEM). Nevertheless, the naira saw a slight improvement during the day, rising by 3.30 naira (0.24%) from Thursday’s rate of 1,383.88 naira. Over the five-day trading period, the naira appreciated by 7.80 naira, or 0.56%, from the 1,388.38 naira observed at the start of the week.
In the parallel market, however, the naira further weakened, closing at 1,415 naira to the dollar, down 15 naira from the 1,400 naira registered a week earlier. It also dipped by three naira from Thursday’s rate of 1,412 naira, widening the gap between the official exchange rate and the parallel market rate from N29 to N35.
This currency pressure is exacerbated by a continued drop in Nigeria’s foreign exchange reserves, which are essential for the CBN to support the naira. As of March 26, 2026, reserves fell to $49.48 billion, a decrease of $540 million (1.08%) from $50.02 billion on March 11, marking the ninth consecutive day of declines.
Amid these challenges, the CBN has rolled out a set of initiatives aimed at boosting liquidity and stabilizing the foreign exchange market. A significant development is the removal of the cash pool requirement for international oil companies (IOCs), enabling them full access to repatriated export proceeds. Previously, authorized dealer banks were required to hold back 50% of IOCs’ export proceeds for 90 days before remittance. The new policy allows IOCs to transfer 100% of their proceeds immediately, provided they comply with documentation and monthly reporting requirements.
This strategic shift aligns with current market dynamics and signifies the CBN’s commitment to fostering a more flexible and liquid foreign exchange environment. Analysts anticipate that these measures will facilitate increased currency inflows, bolster market competitiveness, and attract greater participation from foreign investors.
In an additional move to enhance market transparency, the CBN has issued new guidelines for International Money Transfer Operators (IMTOs). All remittance transactions will now be required to be processed through designated naira payment accounts held by authorized dealer banks. This directive aims to ensure that all beneficiary payments and foreign exchange conversions are executed strictly within the banking system, while allowing IMTOs to maintain multiple accounts across various banks.
These new money transfer regulations, set to take effect on May 1, 2026, tighten compliance requirements further by mandating strict adherence to anti-money laundering and anti-terrorist financing regulations. As the CBN remains committed to regulatory intervention to stabilize the foreign exchange market, these actions aim to increase supply, reduce parallel market leakages, and enhance investor confidence while ensuring orderly market operations.
