Naira Under Pressure: Fresh Volatility Hits FX Market Despite CBN Interventions
- The naira is facing strong turbulence again after days of appreciation in the foreign exchange market
- The foreign exchange gap between the official and parallel markets has widened as investors pull their investments
- Experts disclosed that the pressure is due to increased demand for US dollar by importers and other users
Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
After weeks of relative stability, the Nigerian naira has come under renewed pressure as demand for the U.S. dollar surged across foreign exchange markets, stirring fresh concerns about instability and investor confidence.
Source: Getty Images
The local currency weakened by 0.39% on Tuesday, October 14, 2025, settling at ₦1,463.23 per dollar at the Nigerian Foreign Exchange Market, according to updated data from the Central Bank of Nigeria (CBN).
Dollar strength returns globally
The drop marks the second consecutive day of losses, following a brief period of gains driven by foreign inflows and CBN support.
The naira’s latest slide highlights a broader global trend as the U.S. dollar regains strength.
The greenback has climbed about 3% against a basket of global currencies (DXY) since mid-September, rebounding from its earlier lows this year.
This rebound, analysts say, is fueling renewed pressure on emerging market currencies, including the naira, as investors pivot towards safer dollar assets amid rising global interest rates and geopolitical uncertainties.
Official and parallel markets diverge again
At the official trading window, intraday spot rates peaked at ₦1,474 per dollar before closing at ₦1,463 — ₦11 weaker than Monday’s close.
In the parallel market, the naira slipped to ₦1,490 per dollar, widening the spread between both markets after a brief period of convergence.
Last week, the naira had appreciated by 1.02% week-on-week at the official window, closing at ₦1,455 per dollar, while the parallel market rate stood at ₦1,465 per dollar.
The temporary alignment of rates had boosted optimism among traders and investors that CBN reforms were beginning to yield results.
Speculative demand, seasonal pressures resurface
According to a report by Market Forces Africa, market watchers attribute the renewed fluctuations to speculative activities and seasonal demand for foreign exchange as businesses restock ahead of the year-end period.
The reopening of schools abroad and ongoing import demand have also tightened dollar supply, reversing earlier gains.
Coronation Merchant Bank, in a market note, observed that total FX inflows at the official window fell to $835.6 million from $1.18 billion the previous week, signalling a slowdown in foreign supply.
By composition, foreign portfolio investors accounted for the largest share at 31%, followed by exporters (20.3%), foreign direct investors (19.9%), and non-bank corporates (8.9%).
The CBN’s contribution rose to 14.9%, underscoring continued intervention to stabilise the market.
CBN’s battle to keep the naira steady
Despite the setback, analysts say the CBN’s consistent interventions, coupled with improved FX inflows from oil and remittances, could cushion the naira in the short term.
“We expect the naira to maintain a positive trajectory this week, supported by CBN inflows, barring any global or domestic shocks,” Coronation’s research arm noted.
However, traders warn that sustained dollar demand and limited supply could prolong market instability if structural reforms fail to boost liquidity.
Experts express optimism
As year-end approaches, investors are watching whether the CBN’s forex reforms can weather the latest storm.
Source: Getty Images
There is optimism among traders due to the swelling reserves,” Osas Igho, financial analyst, told Legit.ng on a call, highlighting CBN’s hawkish stance in the market.
“The apex bank has its eyes peeled and watching keenly to mitigate further naira depreciation,” he said.
CBN adjusts the Customs exchange rate
Legit.ng earlier reported that the CBN has released a new exchange rate for cargo clearance at Nigeria’s air and seaports.
The new Customs exchange rate comes as the Nigerian currency, the naira, has maintained its strong position in the foreign exchange market, gaining N12 in three days.
Experts have attributed the naira’s gain to the CBN’s sweeping reforms, foreign exchange inflows, and foreign portfolio investments (FPIs), all signalling renewed confidence in the Nigerian economy.
Source: Legit.ng
