Naira Weakens Against US Dollar at Official FX Market
- The naira's value has dropped by N4 due to high forex demand and limited CBN supply
- In the official market, the Nigerian currency also depreciated against the pound and the euro
- The banks and also black market traders reduced the naira exchange rate against the dollar
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, the stock market, and broader market trends.
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.
Source: Getty Images
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.
In the official market, the naira also depreciated against major currencies:
- The British pound sterling rose by N7.52 to close at N1,856.38/£1, compared with N1,848.86/£1 previously.
- The euro gained N5.82, trading at N1,605.80/€1 versus N1,599.98/€1.
On the retail market, the domestic currency lost further ground:
- At GTBank FX desk, the naira fell by N3 to sell at N1,391/$1, up from N1,388/$1.
- At the black market, it depreciated by N5 to quote at N1,427/$1.
Abdullahi, a BDC trader, told Legit.ng:
“The dollar is being bought at N1,407 and sold at N1,427. The British pound sterling sells for N1,885 and is bought at N1,850. The euro is selling at N1,625, with a buying rate of N1,590.”
Why is the naira depreciating?
The prolonged conflict in the Middle East has heightened global risk aversion, limiting appetite for emerging-market assets despite Nigeria’s attractive yields.
Analysts say offshore inflows may continue supporting the naira in the near term, though structural challenges remain.
Efforts to boost FX earnings include reviewing timelines for resuscitating moribund oil wells and increasing production, which accounts for over 60% of Nigeria’s foreign currency earnings.
Source: Getty Images
CBN latest exchange rates
- CFA: N2.44
- Yuan/Renminbi: N200.93
- Danish Krona: N214.91
- Euro: N1,605.80
- Yen: N8.72
- Riyal: N369.61
- South African Rand: N81.89
- SDR: N1,891.19
- Swiss Franc: N1,752.66
- Pounds Sterling: N1,856.38
- US Dollar: N1,386.70
- UAE Dirham: N377.51
FX reserves on the rise
Earlier, Legit.ng reported that investors have responded positively to these reforms, as reflected in rising foreign exchange reserves.
Mohammed Abdullahi, the CBN deputy governor in charge of economic policy, announced that the nation’s foreign exchange (FX) reserves have risen to a five-year peak of $43.4 billion.
Abdullahi disclosed during the Nigeria Investors Forum in Washington, D.C., United States, held on the sidelines of the IMF World Bank Annual Meetings, where he led discussions on Nigeria’s economic outlook and reform achievements.
Source: Legit.ng
