The naira yesterday weakened to ₦1,629 per dollar in the Nigerian Foreign Exchange Market (NFEM), despite a $688.8 million intervention by the Central Bank of Nigeria (CBN) aimed at stabilising the currency.
According to data published by the apex bank, the indicative exchange rate rose from ₦1,600/$ recorded last Friday, marking a ₦29 depreciation. Similarly, the naira lost ground in the parallel market, falling to ₦1,570/$ from ₦1,565/$ over the weekend.
This widened the spread between the official and parallel market rates to ₦59, compared to ₦35 recorded the previous week.
Monthly data also reflect the sustained pressure on the local currency. In March, the naira depreciated by 2.4% at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window and by 2.6% in the parallel market compared to February levels.
The Afrinvest Monthly Market Report, titled ‘Analysing Global and Nigerian Economies & Financial Markets’, noted that the naira closed March at ₦1,536.82/$ at NAFEM and ₦1,530/$ in the parallel market.
Similarly, AIICO Capital, in its March macroeconomic update, highlighted significant depreciation in the naira driven by strong demand in the foreign exchange market.
“The naira experienced significant depreciation in March 2025 due to persistent demand pressure in the (Nigerian) foreign exchange market,” the report stated. “Despite the Central Bank of Nigeria intervening with substantial dollar sales totalling $668.8 million, the naira weakened by 2.97 per cent m/m, closing at ₦1,536.82/$ from ₦1,492.49/$ at the start of the month.”
The firm attributed the pressure to robust demand from foreign portfolio investors and local corporations. AIICO added that the parallel market mirrored this trend, with the naira falling by approximately ₦43.50 to ₦1,536/$.
Although CBN interventions improved market liquidity mid-month, demand continued to outpace supply.
“In the final week, despite continued CBN dollar sales and a slight appreciation of 0.5 bps, the naira remained under pressure. On a quarterly basis, the naira depreciated by 7 bps q/q at the NFEM window. Meanwhile, external reserves fell by approximately $110 million to $38.31 billion,” the AIICO Capital report added.
Looking ahead, the firm projected that the CBN would likely maintain liquidity support to stabilise the naira in the near term, but warned of potential headwinds.
“However, global risks—like US tariffs and retaliatory measures—may spur volatility and capital flight,” it concluded.
Last week, the naira also saw heightened volatility at the interbank market. While it traded between ₦1,525 and ₦1,535/$ early in the week due to CBN support and moderate offshore inflows, a midweek surge in offshore demand reversed the trend.
This was further exacerbated by falling oil prices, following OPEC+’s supply hike, and heightened global risk aversion spurred by tariff-related statements from former U.S. President Donald Trump.
Consequently, FX demand pressure intensified, and supply remained limited, pushing the naira to as high as ₦1,570/$. Despite further CBN interventions, the local currency ended the week with a 1.97% depreciation to close at ₦1,567.02/$. Foreign reserves also dipped by $149 million to $38.15 billion.
