In March 2025, Nigeria’s currency, the naira, experienced significant strain, weakening by about 3% amid sustained demand in the Nigerian Foreign Exchange Market (NFEM).
According to a report from investment firm AIICO Capital Limited, the naira depreciated from ₦1,492.49/$ to ₦1,536.82/$ over the month, despite efforts by the Central Bank of Nigeria (CBN), which injected $668.8 million into the market to stabilize the currency.
The CBN’s foreign exchange interventions were aimed at shielding the naira from further depreciation, driven by a combination of declining dollar inflows and mounting offshore demand for foreign currency. Throughout the first quarter of 2025, the CBN spent approximately $669 million in FX interventions.
Despite these efforts, the market continued to face considerable pressure. The naira opened March at ₦1,510/$, and demand remained high—especially from foreign portfolio investors and local corporations. In the parallel market, the naira slid by ₦43.50, closing at ₦1,536.00/$.
Mid-month saw a brief improvement in liquidity, thanks to CBN’s interventions, but the demand continued to outstrip supply, leaving the naira vulnerable. By the end of the quarter, the naira had not only failed to recover but posted a modest depreciation at the NFEM window. The country’s external reserves also took a hit, falling to $38.31 billion, a decline from the three-year high of $43 billion reached earlier.
The pressure on the naira was further exacerbated by debt service obligations and continued dollar sales by the CBN. To help stabilize the parallel market, the CBN also directed Bureau de Change (BDC) operators to buy $25,000 from authorized dealer banks at the official exchange rate.
Despite these efforts, the broader external environment, including President Donald Trump’s global tariffs, continued to shake market stability, with stock prices plummeting at the opening of the month.
As a result, the naira remains under pressure, and the outlook for its stabilization remains uncertain, as both domestic and international factors continue to weigh heavily on Nigeria’s foreign exchange landscape.
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Naira Faces Heavy Pressure in March 2025 as Dollar Demand Surges, Despite CBN Interventions – TV360 Nigeria
