Monday, April 7, 2025 - The Nigerian naira came under significant pressure in March 2025, weakening further despite ongoing interventions by the Central Bank of Nigeria (CBN), according to a report by investment firm AIICO Capital Limited.
The report indicated that the naira depreciated by
approximately 3 percent during the month, sliding from ₦1,492.49/$ to
₦1,536.82/$, even as the CBN injected $668.8 million into the Nigerian Foreign
Exchange Market (NFEM) in a bid to stabilise the local currency.
The CBN deployed around $669 million in foreign exchange
interventions during the first quarter of 2025, aiming to protect the naira
from further depreciation amid declining dollar inflows and heightened demand
from offshore investors and domestic corporations. Despite these efforts, the
naira remained under pressure as demand continued to outstrip supply.
The month began with the exchange rate at ₦1,510/$, and as
demand persisted, particularly from foreign portfolio investors and local
businesses, the pressure on the naira intensified. The parallel market
reflected similar strain, with the naira dropping by ₦43.50 to close at
₦1,536.00/$.
Though the CBN’s mid-month interventions provided a
temporary boost in liquidity, it was insufficient to balance the market, and
the naira ended the quarter weaker. On a quarterly basis, the currency
registered a modest depreciation at the NFEM window, while Nigeria’s external
reserves declined to $38.31 billion.
In an additional effort to stabilise the parallel market,
the CBN directed Bureau de Change operators to purchase $25,000 from authorised
dealer banks at the official exchange rate. However, despite these measures,
the country’s reserves retreated from a three-year high of $43 billion due to
ongoing debt service payments and continued dollar sales.
The situation was further compounded by global economic instability, with
President Donald Trump’s sweeping tariffs rattling markets and contributing to
volatility, as stocks opened lower on Monday, April 7.
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