The naira has further depreciated to ₦1,629 per dollar in the Nigerian Foreign Exchange Market (NFEM), despite the Central Bank of Nigeria’s (CBN) intervention of $688.8 million. According to data from the apex bank, the indicative exchange rate rose from ₦1,600 per dollar last week to ₦1,629, marking a depreciation of ₦29.
In the parallel market, the naira also depreciated slightly, falling to ₦1,570 per dollar from ₦1,565 per dollar over the weekend. This has widened the margin between the parallel market and the NFEM rate, increasing from ₦35 to ₦59 per dollar.
The naira’s downward trend has been observed over the last month, with a 2.4% depreciation in the NFEM and a 2.6% drop in the parallel market during March 2025 compared to February. This depreciation was attributed to strong demand pressure in the foreign exchange market, particularly from foreign portfolio investors and local corporations.
Reports from Afrinvest and AIICO Capital corroborate these observations, noting that the naira has been under significant pressure due to ongoing demand and insufficient supply, despite the CBN’s substantial interventions. AIICO Capital’s monthly report mentioned that the naira dropped by 2.97% in March, closing at ₦1,536.82/$ from ₦1,492.49/$ at the beginning of the month.
Despite mid-month interventions by the CBN, which temporarily improved liquidity, the demand for foreign exchange outstripped supply, causing a further dip in the naira’s value. In the final week of March, despite continued CBN dollar sales and slight short-term appreciation, the naira continued to face downward pressure.
Looking ahead, the CBN is expected to continue its liquidity support to stabilize the naira in the near term. However, external risks, such as the global implications of US tariffs, may contribute to further volatility and potential capital flight, as highlighted in AIICO Capital’s outlook.
