Naira Suffers Sharp Fall amid Rising External Reserves, CBN Releases New Exchange Rate
- Nigeria's naira faced a renewed pressure, trading at N1,384 per dollar amid heightened demand for foreign currency
- External reserves approach $50 billion, aided by remittances and renewed foreign investment interest
- Rising global oil prices could enhance Nigeria's foreign exchange earnings, potentially stabilising the naira
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s currency came under renewed pressure on Tuesday, March 3, 2026, slipping further at the official window despite an improving reserves position.
Latest data released by the Central Bank of Nigeria showed that the naira touched an intraday high of N1,405 per dollar at the Nigerian Foreign Exchange Market, reflecting sustained demand for foreign currency.
Source: Getty Images
By the close of trading, the local unit settled at N1,384 per dollar, compared to N1,378 recorded a day earlier.
According to a report by MarketForces Africa, trading activity during the session indicated that the exchange rate moved within a band of N1,370 to N1,405 per dollar. The wide range underscores persistent volatility as businesses and investors scramble to meet foreign payment obligations.
FX purchases, market pressure persist
The currency’s recent downward trend has stretched beyond 10 consecutive days.
Analysts link the sustained weakness partly to the apex bank’s unusual foreign exchange purchase activity in February, which tightened liquidity conditions in the official market.
Increased demand for the dollar, particularly for imports and offshore payments, has continued to outweigh supply in recent sessions.
This imbalance has left the naira vulnerable, even as policymakers maintain that reforms aimed at improving transparency and boosting liquidity are yielding results.
Market watchers note that short-term pressure may persist if foreign currency demand remains elevated.
However, expectations of stronger inflows could help moderate further losses.
External reserves are near $50 billion
In contrast to the currency’s slide, Nigeria’s gross external reserves have continued to edge higher.
Recent figures indicate that reserves are approaching the $50 billion mark, supported by steady remittance inflows and renewed interest from foreign portfolio investors participating in the country’s financial markets.
The rising reserve buffer is seen as a positive signal for macroeconomic stability. A stronger reserves position enhances the country’s ability to meet external obligations and provides the central bank with greater capacity to intervene when necessary.
Economists argue that sustained inflows, if maintained, could gradually restore investor confidence and ease pressure on the exchange rate over time.
Oil price surge may boost FX inflows
Global oil market developments could further influence Nigeria’s external position.
Crude prices climbed sharply following disruptions linked to the conflict involving the United States and Iran, which affected energy shipments across parts of the Middle East.
Attacks targeting shipping routes and energy infrastructure reportedly disrupted exports in key producing nations, tightening global supply and pushing prices upward.
For Nigeria, a major crude exporter, higher oil prices could translate into increased foreign exchange earnings in the coming weeks.
Market consensus suggests that stronger oil receipts, combined with improving investor inflows, may offer some relief to the naira if supply conditions improve.
Source: Getty Images
Outlook: Stability or further weakness?
While the naira’s recent performance highlights ongoing demand pressures, improving external reserves and the prospect of stronger oil-driven inflows present a more balanced outlook.
Much will depend on how effectively supply matches demand in the foreign exchange market.
If inflows continue to strengthen and confidence builds, the currency could find a firmer footing. For now, traders remain cautious as the market navigates global uncertainty and domestic liquidity dynamics.
Dollar sells at high rate as CBN crashes naira
Legit.ng earlier reported that the naira came under fresh pressure in the foreign exchange market after the Central Bank of Nigeria moved to curb its recent rally by mopping up dollars from the system.
On Monday, February 23, 2026, the Central Bank of Nigeria intervened in the FX market, reportedly withdrawing about $190 million.
The move was aimed at slowing the naira’s rapid appreciation, which had gathered pace in the preceding week, according to a report by The Nation.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
