Economy
Currency Swap Deal: CBN Lacks Transparency—Vitafoam Boss
By Dipo Olowookere
Managing Director of Vitafoam Nigeria Plc, Mr Taiwo Adeniyi, has accused the Central Bank of Nigeria (CBN) of not being transparent in its dealings with stakeholders in the industry.
Mr Adeniyi was quoted by Daily Sun as saying that the apex bank sometimes shows partiality when carrying out its policies.
He was reacting to the announcement made by the CBN Governor, Mr Godwin Emefiele, of the bank’s readiness to buy Commercial Paper (CP) from large companies in order to lend to them at single digit interest rate.
According to Daily Sun, some companies were still waiting for the policy document from the CBN on this.
When asked for his opinion of the issue, the Vitafoam chief said, “When they (CBN) are taking such decisions, they have certain companies they are working with. So, they know what they are doing. When they are taking such decisions they know which organizations can issue commercial paper.
“They know the people they want to use it to help. Even the Yuan they are talking about; has it started? Is it operational?
“The news has gone all over the world that we are doing currency swap. Who and who are benefiting from it? They should tell us.
“Even the commercial banks that know how to operate it, you will hear them say they are still waiting for CBN.
“And yet, it is in the news that they have started the currency swap. So, when they are taking decisions, they know the companies they are targeting to help. So they just push it under the guise of every one of us,” Mr Adeniyi was quoted as saying.
But reacting to the allegation of being biased and not transparent, spokesman of the central bank, Mr Isaac Okorafor, when he contacted by Business Post, said the apex bank has always been plain in its operations.
“Which aspect of the deal (currency swap) does he feel we are not transparent? Is it in the amount of the deal or the rate or the trading?
“On the former, anyone doubting us can crosscheck with the PBoC. On the latter, trading is open and transparent and dealers are allowed to quote whatever they like.
“However as in the rules of the market, anyone who makes an unreasonable quote will be punished by the extent of his or her deviation from the rate that we feel should clear the market.
“It is done to ensure that speculation is put at bare. We have just started this process and with time, we will perfect it,” Mr Okorafor told Business Post in a text message.
Also commenting on the intention of the CBN to buy CP from firm, Managing Director of Afrinvest Securities Limited, Mr Ayodeji Ebo, said the development was a form of quantitative easing and advised the apex bank to come up with structures that will make SMEs participate in it.
“This is a form of quantitative easing. The only reservation is that this will be mainly enjoyed by the blue chip companies due to the SMES inability to issue Commercial Paper. The CBN may need to come up with structures that will enable the SMEs take part in the quantitative easing as this segment is more critical to the growth of the economy,” he said.
The CBN Governor had said at the end of the last Monetary Policy Committee (MPC) meeting in Abuja that the apex bank would buy commercial paper from large companies to lend to them at single digit interest rate.
“The MPC deliberated extensively on what can be done to encourage banks to lend to the private sector because of the numbers we looked at during the main meeting. The MPC was concerned that credit to the real sector was sliding and there was need to incentivise the banks to lend to the private sector.
“At this meeting, we saw improvement which was gratifying, but we feel we must still do what we want to do. In order to achieve lowering interest rate especially to agriculture and manufacturing sectors, we will encourage large corporates to issue CP into the market. In order to complement the banks, we expect that the CP will come in single-digit of 9 percent or below 10 percent, and for a long tenor, as high as five years or seven years, with a two-year moratorium, and for specific purposes.
“If the CBN sees those kinds of notes in the market, we will complement the efforts of the banks through any mechanism to support that by lending to that corporate at that single-digit rate. It is not meant to be in competition with the banks, it is meant to complement their efforts. We want to see that our objective to see to it that we achieve lower interest rate of a single digit can come through this means.
“If a bank lends such money for new projects or plant expansion and it is verifiable, not for refinancing, a project for seven years inclusive of two years moratorium at 9 percent. That bank providing those evidence and verified by the CBN, we will go into bank’s Cash Reserve Ratio and we will release cash of the equivalent sum to that bank at zero cost. In which case, that bank will earn its spread of 9 per cent of that money.
“We feel this is novel. It is something that we should give a chance. In the past, we had reduced CRR and released liquidity into the market, but the liquidity was not channelled into the high-impact, employment-generating sectors and productivity sectors of the economy.
“That is why we feel we should approach it through this means. We believe this will work. We will, from time to time, monitor the level of liquidity in the market and we feel that rather than the banks using their monies to buy Treasury Bills, they can put money into these sectors. And we will provide the liquidity to fund these transactions, as long as they meet these specified terms and conditions.”
A commercial paper (CP) is an unconditional promise by a person to pay to the order of another person a certain sum at a future date.
Nigeria’s trading environment has changed sharply since the Central Bank of Nigeria pushed rates to 27.5%, and the impact is being felt across the currency market. A rate that high does more than tighten financial conditions. It changes how traders read momentum, how they manage risk, and how they think about the naira against the dollar. Reuters reported that the CBN raised the policy rate to 27.50% in November 2024 after a string of hikes, and later kept it there as inflation and exchange rate pressures remained central concerns.
For anyone active in Nigeria’s currency space, forex trading now requires a very different mindset. What worked in a looser money environment does not always work when rates stay this high. Liquidity behaves differently, sentiment shifts faster, and market participants become much more sensitive to inflation data, policy guidance, and reserve trends. Reuters also reported that the CBN has tied its tight stance to the need to control inflation and stabilize the market, while reforms have improved reserves and confidence in the foreign exchange system.
Why a 27.5% rate changes the market mood
A rate this high affects more than borrowing costs. It resets expectations. Traders start looking at the naira through a different lens because such an aggressive stance tells the market that policymakers are serious about defending stability, even if growth conditions become tougher. In Lagos and Abuja, where many traders track both official policy signals and real market pricing, that shift has become impossible to ignore.
Higher rates reshape risk appetite
When rates rise to this level, speculative behavior often becomes more cautious. Some traders reduce position sizes. Others stop chasing moves and wait for stronger confirmation before entering. Why does that happen? Because a tight policy environment tends to punish weak conviction and reward discipline.
There is also a psychological effect. A market with a 27.5% policy rate feels heavier. It is like driving on a road where every turn demands more care than before. That change in mood forces traders to become more selective, especially in a country like Nigeria where inflation and currency sentiment still move together closely. Reuters said inflation eased after a statistical rebase, but the central bank still held rates high because broader pressure had not disappeared.
The naira story is no longer just about panic
Nigeria’s currency narrative has also become more layered. Earlier fears were largely about shortages and disorder, but now traders are also watching reforms, reserves, and policy credibility. Reuters reported that net foreign exchange reserves rose strongly in 2025 and that the CBN said clearer rules and reforms had reduced distortions and volatility.
That matters because strategy changes when the market starts trusting policy a little more. Traders can no longer rely only on the old playbook of assuming one direction and staying there.
How trading strategies are being reset
The biggest reset is in time horizon. In a market shaped by tight policy, many traders become less comfortable with broad, lazy positioning. They look for cleaner setups and faster reactions instead. A currency market under heavy policy influence often rewards timing more than stubborn conviction.
Shorter setups are becoming more practical
Many Nigeria focused traders now pay closer attention to event driven opportunities. Central bank comments, inflation releases, reserve updates, and reform announcements matter more than they used to. Reuters reported in March 2026 that the CBN eased some foreign exchange rules for oil companies to improve market liquidity and confidence, another sign that policy decisions are still actively shaping the currency landscape.
That makes short and medium term strategy more relevant. You might see a naira move that looks technical on the surface, but underneath it is often responding to policy changes, liquidity shifts, or fresh confidence in reserves. In Nigeria, the chart and the macro story now feel more connected than before.
Risk management matters more than prediction
This is where serious traders separate themselves from hopeful ones. A high rate environment does not just reward the right view. It rewards survival. Traders in Port Harcourt or Lagos who stay too attached to a single bias can get caught when policy or liquidity changes suddenly alter the mood.
I have seen markets like this before. They look calm until they do not. Then the move comes fast. That is why many traders are adjusting stop placement, reducing leverage, and focusing more on capital protection than on chasing every opportunity.
The reset, in other words, is not only strategic. It is behavioral.
Why Nigeria’s market may keep evolving
The CBN’s policy stance has already pushed traders to adapt, but the story is still developing. Reuters reported in April 2025 that the central bank sold nearly $200 million to support the naira after tariff related market shocks, showing that officials remain willing to act when volatility becomes disruptive. Reuters also reported this month that the naira had been relatively stable, supported by dollar liquidity from bond investments and exporter repatriations.
Stability can create a different kind of opportunity
A more orderly market does not mean fewer opportunities. It means different ones. Instead of trading pure panic, participants may increasingly trade around policy credibility, flow trends, and relative stability. For Nigeria, that could mark an important shift.
That is why the 27.5% rate matters so much. It has forced traders to stop relying on old assumptions and start working with a market that is slowly becoming more policy driven, more selective, and in some ways more professional.
Conclusion
The CBN’s 27.5% policy rate is forcing a major reset because it changes how traders approach risk, timing, and market structure in Nigeria. High rates, stronger reserves, and ongoing reforms have made the naira story more complex than it was before, and that means strategy has to evolve as well.
For traders in Nigeria, the message is clear. This is no longer a market where old habits are enough. Tight policy has raised the standard, and the traders who adjust their methods are more likely to stay effective as the next phase of the currency story unfolds.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange weakened by 0.22 per cent on Tuesday, April 28, with the market capitalisation down by N4.8 billion to N2.420 trillion from N2.425 trillion, and the NASD Unlisted Security Index (NSI) down by 9.01 points to 4,044.96 points from 4,053.97 points.
During the session, the price of Central Securities Clearing System (CSCS) Plc went down by N1.82 to N767.05 per share from N78.87 per share, while FrieslandCampina Wamco Nigeria Plc appreciated by N1.90 to N100.00 per unit from N98.10 per unit.
According to data, the value of trades increased by 265.7 per cent to N27.1 million from N7.4 million units, and the volume of transactions surged by 305.2 per cent to 1.3 million units from 319,831 units, while the number of deals decreased by 6.9 per cent to 27 deals from 29 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.8 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also finished as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.
On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.
It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.
The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.
The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.
The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.
Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.
Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.
Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.
However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.
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