Over the past 18 months, the Central Bank of Nigeria (CBN) has implemented various policy adjustments, market liberalization efforts, and increased transparency to address disparities in exchange rates. This assessment comes from Zeal Akaraiwe, CEO of Graeme Blaque, during a recent interview on a global business news platform.
As of 2025, the parallel market exchange rate has steadily appreciated, stabilizing around the N1,500/$ mark. Bureau de Change (BDC) operators report that the rate in the parallel market currently hovers near N1,500/$, while the official market rate stands at approximately N1,501/$ as of February 25. This near alignment between the two markets signifies a notable convergence.
Akaraiwe, an expert in banking and treasury, attributed these improvements to policy corrections that have addressed previous missteps in foreign exchange management.
He remarked, “When people criticized the Central Bank’s issuance of circulars over the past 15 to 18 months, I remind them that the Central Bank is not regulating by body language.”
He further explained, “If past mistakes need correction, the central bank must make that clear to the industry—and the most effective way to do that is through circulars. Honestly, what other option is there? This is why we saw a surge of circulars in early 2024, which helped clear up distortions and alleviate bottlenecks.”
In 2024, the CBN issued almost 20 circulars related to foreign exchange management, including one on the use of Bloomberg’s BMatch system for interbank FX trading.
Akaraiwe emphasized that the introduction of BMatch in December exposed the information gap in the FX system for much of 2024.
He stated, “I recall mentioning last year that many were unaware that for most of the year—starting around February or March, and certainly within the first quarter—the inflows into the economy exceeded the outflows. But this wasn’t widely known.”
This lack of information led to market panic. However, a clear turning point came in December when the Central Bank introduced BMatch, which led to a 10% appreciation of the currency almost immediately.
Akaraiwe noted that the appreciation was not due to an increase in cash flow, additional injections, or direct central bank intervention, but rather due to enhanced transparency that allowed market participants to better understand the available supply.
Akaraiwe also addressed a common misconception regarding the CBN’s role in defending the naira. Unlike some experts, he argued that the Central Bank is not defending the naira. In 2024, the CBN’s net contribution to the foreign exchange market was approximately 3%, a significant drop compared to the 70-80% seen in previous years.
He pointed out, “Historically, in 2022 and 2023, the Central Bank was likely supplying as much as 70% to 80% of the foreign exchange in the market. That situation appeared more like a defensive stance.”
“In contrast, by 2024, the Central Bank’s contribution dropped to under 10%. If you break it down further, it’s closer to 4%. After factoring in the Central Bank’s FX sales and purchases, its actual contribution to the market was about 3%.”
However, Akaraiwe clarified that selling foreign exchange is part of the Central Bank’s routine operations. As the CBN governor has frequently stated, this action is part of maintaining market stability. What many external observers may not realize—but those within the market understand—is that the Central Bank not only sells FX but also buys it to ensure sustained market stability.
