The naira depreciated to ₦1,629 per dollar in the Nigerian Foreign Exchange Market (NFEM) on Monday, despite a $688.8 million intervention by the Central Bank of Nigeria (CBN).
Data from the CBN revealed that the naira’s indicative exchange rate rose from ₦1,600 per dollar last Friday to ₦1,629 per dollar, marking a ₦29 depreciation. Similarly, in the parallel market, the naira weakened from ₦1,565 per dollar to ₦1,570 per dollar.
This led to an increase in the margin between the parallel market rate and the NFEM rate, which widened to ₦59 per dollar from ₦35 per dollar the previous week.
In March, the naira depreciated by 2.4% at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and 2.6% in the parallel market, compared to February. According to the latest Afrinvest Monthly Market Report titled ‘Analysing Global and Nigerian Economies & Financial Markets’, the naira had fallen to ₦1,536.82/$ at the NAFEX window and ₦1,530.00/$ at the parallel market.
AIICO Capital’s monthly macroeconomic report for March also highlighted significant depreciation due to sustained demand pressure in the forex market. Despite the CBN’s intervention with a substantial $668.8 million in dollar sales, the naira weakened by 2.97% month-on-month, closing March at ₦1,536.82/$ from ₦1,492.49/$ at the beginning of the month.
AIICO Capital noted that demand, particularly from foreign portfolio investors and local corporations, remained strong during this period. The parallel market reflected similar trends, with a depreciation of about ₦43.50/$ to ₦1,536.00/$. Though liquidity improved mid-month with CBN interventions, demand continued to exceed supply.
Despite further CBN dollar sales in the final week of March, the naira remained under pressure, appreciating slightly by 0.5 basis points but closing at ₦1,567.02/$, a 1.97% week-on-week depreciation. External reserves fell by approximately $149 million to $38.15 billion, while the naira depreciated by 7 basis points quarter-on-quarter at the NFEM window.
Looking ahead, AIICO Capital believes the CBN will maintain liquidity interventions to stabilize the naira in the short term. However, the report also warns of potential global risks, such as US tariffs and retaliatory measures, which could spur volatility and capital flight.
In the past week, the naira experienced increased volatility in the interbank market. Early in the week, it remained relatively stable, trading between ₦1,525–₦1,535/$ due to consistent CBN support and moderate offshore inflows. However, by midweek, demand surged amid weaker oil prices, driven by OPEC+’s supply hike and global risk-off sentiment following US tariff announcements. This led to heightened FX demand pressure and limited supply, pushing the naira as high as ₦1,570/$. Despite CBN interventions, the naira continued to weaken, leading to a 1.97% depreciation for the week. Foreign reserves decreased by $149 million to $38.15 billion.
Channelstv
