By Emmanuel Kwada
The Nigerian naira has depreciated to ₦1,629 per dollar in the Nigerian Foreign Exchange Market (NFEM), reflecting a steep decline of ₦29 from ₦1,600 just one week ago. This downturn occurred despite a substantial intervention by the Central Bank of Nigeria (CBN), which injected $688.8 million into the market to stabilize the currency.
Latest data from the apex bank indicates that the naira also fell in the parallel market, reaching ₦1,570 per dollar from ₦1,565 over the weekend. The widening gap between the NFEM and parallel market rates has now escalated to ₦59, up from ₦35 just a week prior, highlighting a growing disparity in the currency’s value across different markets.
March proved to be a challenging month for the naira, which saw depreciations of 2.4% at the Nigerian Autonomous Foreign Exchange Market and 2.6% in the parallel market compared to February.
Monthly Market Report revealed that the naira closed at ₦1,536.82/$ and ₦1,530.00/$ at the NAFEM window and parallel market, respectively
The Afrinvest Monthly Market Report revealed that the naira closed at ₦1,536.82/$ and ₦1,530.00/$ at the NAFEM window and parallel market, respectively, indicating sustained demand pressures.
AIICO Capital’s macroeconomic report for March confirmed these trends, citing persistent demand for foreign currency from both foreign portfolio investors and local corporations. Despite CBN’s efforts to bolster liquidity through dollar sales, the naira’s value continued to slip, closing the month at ₦1,536.82, down from ₦1,492.49 at the beginning of March.
The report highlighted that the final week of March saw a brief moment of stability, with the naira trading between ₦1,525–₦1,535 on the back of ongoing CBN support. However, this was short-lived as offshore demand surged, exacerbated by falling oil prices following OPEC+ supply increases and heightened global economic tensions linked to U.S. tariff discussions.
As the naira faces mounting pressure, experts remain cautiously optimistic about the CBN’s ability to stabilize the currency in the short term. However, they warn that global risks, including potential U.S. tariffs and retaliatory measures, could lead to increased volatility and capital flight from Nigeria.
With external reserves dwindling to approximately $38.31 billion after a decline of about $110 million, the outlook for the naira remains uncertain as it navigates through complex economic challenges. As market participants watch closely, the future of Nigeria’s currency hangs in the balance amid rising demand and shifting global economic conditions.
