Naira Depreciates Further and FX Turnover Drops in Official Window
- Nigeria's naira depreciated 0.22% to ₦1,383.58 amid decreased FX activity
- The parallel market showed further naira weakness to ₦1,425 per dollar due to persistent demand
- The modest decline in external reserves signalled ongoing pressures on Nigeria's FX buffers
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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 at the start of the week, as the naira depreciated slightly in the official market amid a noticeable drop in foreign exchange (FX) activity.
Data from the Central Bank of Nigeria (CBN) shows the naira weakened by 0.22 per cent to close at ₦1,383.58 per dollar at the Nigerian Foreign Exchange Market (NFEM) on Monday, March 30, 2026.
Source: Getty Images
The decline coincided with a slowdown in trading volumes among authorised dealer banks, pointing to reduced liquidity and persistent demand for dollars across the system.
Total FX turnover fell to $142.29 million, down from $172.89 million recorded in the previous session. The number of deals executed also dropped to 115, compared to 141 deals on Friday, March 27, underscoring weakening market participation.
Intraday data revealed that the naira traded within a band of ₦1,380 to ₦1,391 per dollar, highlighting continued volatility despite efforts to stabilise the market.
Parallel market mirrors pressure
The pressure on the naira was not limited to the official window. In the parallel market, the local currency weakened further to around ₦1,425 per dollar, reflecting sustained demand from individuals and businesses unable to access FX through official channels.
This dual-market depreciation signals that underlying structural challenges, particularly demand-supply imbalances, remain unresolved.
Recent trends show that the naira has struggled to maintain earlier gains recorded in February, when improved inflows and stronger reserves briefly supported the currency. By March, however, renewed demand pressures and reduced inflows have triggered fresh volatility.
Weekly performance shows broader weakness
On a week-on-week basis, the naira recorded losses across both market segments.
At the official window, the currency depreciated by ₦26.67 to close near ₦1,380/$1, while the parallel market weakened by over 1 per cent to around ₦1,420/$1.
Despite this, the gap between the two markets narrowed significantly to about ₦39.42 per dollar, down from ₦51.10, suggesting some level of convergence driven by ongoing FX reforms and improved price discovery.
Analysts say this narrowing spread reflects the CBN’s continued push towards a unified and more transparent exchange rate system.
External reserves dip slightly
Nigeria’s external reserves also recorded a modest decline, settling at approximately $49.48 billion.
Although still relatively strong by historical standards, the dip highlights ongoing pressures on the country’s FX buffers, especially as demand for imports and offshore obligations persists.
Earlier in the year, reserves had climbed above $50 billion, supported by reforms and increased inflows, but have since eased due to market adjustments and global uncertainties, per a report by MarketForces Africa.
Global oil rally adds mixed signals
In the global oil market, prices surged sharply, driven by escalating geopolitical tensions in the Middle East.
Brent crude rose to about $112 per barrel, marking one of the strongest monthly rallies on record, while US West Texas Intermediate also climbed significantly.
The rally is linked to the ongoing conflict involving the United States, Israel, and Iran, which has disrupted supply routes and heightened fears over energy security.
For Nigeria, higher oil prices typically translate to stronger FX inflows. However, analysts warn that structural constraints, including production challenges and existing crude-backed obligations, may limit the immediate benefits to the FX market.
Outlook: Fragile stability amid persistent demand
The latest data paints a picture of a fragile FX market where modest gains can quickly be erased by demand shocks.
While policy reforms by the CBN have improved transparency and narrowed rate gaps, liquidity challenges and external pressures continue to weigh on the naira.
Source: Getty Images
Until FX inflows strengthen sustainably and demand pressures ease, the currency is likely to remain volatile in the near term, with both official and parallel markets moving in cautious tandem.
Naira weakens against US dollar at official FX market
Legit.ng earlier reported that the naira fell against the US dollar in the Nigerian Foreign Exchange Market (NAFEM) on Wednesday, March 25, dropping N4.07 or 0.29% to N1,386.70/$1 from Tuesday’s N1,382.63/$1.
The decline was driven by forex demand pressures amid limited supply from the Central Bank of Nigeria (CBN) and other sources, with the central bank recently not conducting any FX sales to eligible financial institutions, where Bureaux de Change (BDC) operators can access $150,000 weekly.
The naira also depreciated against major currencies in the official market.
Proofreading by Funmilayo Aremu, copy editor at Legit.ng.
Source: Legit.ng
