The increased CBN inflows, along with anticipation of a rate hike, have propelled the naira to its most impressive daily performance since March, with the currency posting a 6.4% daily gain against the dollar.
The apex bank is also poised to raise headline interest rates one last time to support the naira and throttle inflation, which is near a three-decade high, before ending its aggressive tightening campaign.
Data from FMDQ revealed the naira gained nearly N100/$ as the local currency exchanged hands for N1,500.32 on Monday, representing a whopping 640 basis points increase higher than the N1,596.92/$ quoted last Friday.
In the black market, a popular medium for trading FX among the populace, the local currency settled at N1,570 per dollar, gaining less than 100 basis points compared to N1,580 on Friday.
The CBN sold roughly $106.5 million to registered foreign exchange dealers over two days late last week to support the country’s failing foreign currency market.
Nigeria’s apex bank claims that the primary drivers of the most recent fluctuations in the foreign exchange market are the increased demand from business organizations and the expected seasonal rise in the summer.