Ayobami Oyalowo, Executive Director of the Osun River Basin, has stated that the Federal Government’s interventions have helped stabilise the foreign exchange (FX) market and strengthen the naira.
In a statement on Monday, Oyalowo clarified that rather than “defending” the naira, as some Nigerians believe, the Central Bank of Nigeria (CBN) has taken strategic steps to support it, with visible results.
A banker and expert in finance, politics, and development economics, Oyalowo explained that defending a currency means artificially pegging its value regardless of market forces, a strategy employed by the previous CBN leadership. In contrast, the current CBN administration has adopted a support-based approach by fostering a functional and liquid market.
He highlighted key measures such as clearing FX backlogs, increasing liquidity, and allowing market forces to determine the exchange rate. “The current CBN has enabled ‘price discovery,’ allowing the market to determine the true value of the naira,” he said.
One of the major steps taken was clearing accumulated FX backlogs from the previous CBN leadership. According to Oyalowo, the government had previously collected naira from businesses and individuals in exchange for promised dollars but failed to provide them. The current CBN administration has now settled approximately $7 billion in outstanding commitments, restoring market confidence.
Additionally, the CBN injected about $2 billion into the FX market by selling dollars to banks, improving liquidity and ensuring access to foreign currency at official rates.
Oyalowo further noted that Nigeria secured $4 billion through bond issuance, further boosting the supply of dollars in the FX market. By fulfilling these obligations, the CBN has reinforced trust and created a more stable environment for currency exchange.
In total, the CBN has mobilised and injected over $8 billion to stabilise the FX market, ensuring liquidity and addressing outstanding obligations.
“This can be seen as ‘support’ rather than ‘defence’—a step towards a healthier and more transparent FX market where the naira can find its true value,” Oyalowo concluded.
Credit: NAN (Text Excluding Headline)
