Naira Strengthens to N1,348 Per Dollar as CBN Deploys $150,000 Weekly BDC Allocation
The Nigerian naira closed at N1,348 per dollar on Friday, marking a week-on-week appreciation of N10, as the Central Bank of Nigeria implements a new $150,000 weekly allocation strategy for Bureau de Change operators to stabilize foreign exchange markets.
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The Nigerian naira recorded week-on-week gains in the official foreign exchange market, closing at N1,348 per dollar on Friday, according to data from Nairametrics. The local currency appreciated by N10 compared to the previous week's close, extending a period of steady strengthening against the US dollar that has drawn attention from market participants and policymakers alike.
The appreciation comes as the Central Bank of Nigeria (CBN) deploys a targeted intervention strategy aimed at stabilizing exchange rate dynamics. The monetary authority has granted 82 recapitalized Bureau de Change (BDC) operators access to $150,000 weekly from the Nigerian Foreign Exchange Market (NFEM), according to Legit.ng. This allocation mechanism represents a structured approach to addressing dollar supply constraints that have historically contributed to exchange rate volatility in Africa's largest economy.
Strategic Intervention in Foreign Exchange Markets
The CBN's weekly allocation framework targets a specific segment of the foreign exchange ecosystem that serves retail demand for hard currency. By channeling $150,000 per week to each of the 82 recapitalized BDC operators, the central bank aims to ease dollar supply bottlenecks and narrow the gap between official and parallel market exchange rates. This intervention strategy reflects the monetary authority's recognition that sustainable currency stability requires addressing supply-side constraints across multiple market segments.
The recapitalization requirement for BDC operators participating in the allocation program serves dual objectives: strengthening the financial capacity of foreign exchange intermediaries while establishing eligibility criteria that ensure allocated dollars reach legitimate market participants. According to Legit.ng, the initiative is designed to "ease dollar supply, stabilise the naira, and narrow exchange rate gaps" that have characterized Nigeria's foreign exchange landscape in recent quarters.
Market Response and Economic Implications
The naira's appreciation trajectory has generated mixed responses from Nigerian stakeholders, with some observers expressing cautious optimism about the sustainability of recent gains. Media personality Daddy Freeze commented on the currency's improvement, noting that the exchange rate had reached N1,310 per dollar at certain points during the week, and suggesting that "Tinubu's government is onto something," according to Legit.ng. However, he emphasized the critical importance of maintaining stability rather than experiencing temporary appreciation followed by renewed depreciation.
The week-on-week appreciation of N10 represents a 0.74% gain against the dollar, a modest but significant movement in a market that has experienced substantial volatility in recent years. For context, the naira traded above N1,500 per dollar at various points in 2025, making the current N1,348 level a notable improvement. The sustainability of these gains will depend on multiple factors including oil revenue flows, foreign portfolio investment, and the effectiveness of CBN interventions in maintaining adequate dollar liquidity.
Forward-Looking Currency Dynamics
The CBN's structured allocation approach through BDC operators represents one component of a broader monetary policy framework aimed at exchange rate stability. Nigeria's foreign exchange challenges stem from structural factors including heavy reliance on oil exports for dollar earnings, limited foreign direct investment flows, and persistent demand for hard currency across various economic sectors. The $150,000 weekly allocation to 82 BDC operators translates to approximately $12.3 million in weekly dollar supply through this channel alone.
Market analysts will monitor whether the naira can sustain its recent appreciation as Nigeria navigates global economic headwinds and domestic fiscal pressures. The central bank's ability to maintain consistent dollar allocations while managing its foreign reserves will prove critical to exchange rate stability in coming months. With oil prices remaining a key determinant of Nigeria's external balance, the interplay between commodity markets and foreign exchange dynamics will continue shaping the naira's trajectory against major currencies.
The foreign exchange market will face additional tests as seasonal demand patterns emerge and as Nigeria's economic reforms under President Bola Tinubu's administration continue to unfold. The sustainability of the naira's current strength will ultimately depend on whether structural improvements in dollar supply can match persistent demand pressures across Africa's most populous nation.