In March 2025, the Nigerian naira faced intensified pressure, weakening further despite continued efforts by the Central Bank of Nigeria (CBN) to stabilize the currency, according to a report from investment firm AIICO Capital Limited.
The report noted that the naira depreciated by roughly 3% during the month, falling from ₦1,492.49/$ to ₦1,536.82/$, even as the CBN injected $668.8 million into the Nigerian Foreign Exchange Market (NFEM) to shore up the currency.
Throughout the first quarter of 2025, the CBN deployed approximately $669 million in foreign exchange interventions, seeking to curb the naira’s slide amid dwindling dollar inflows and rising demand from both foreign investors and domestic corporations. However, the currency remained under pressure as market demand continued to exceed supply.
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The month began with the exchange rate at ₦1,510/$, but persistent demand—particularly from foreign portfolio investors and local businesses—intensified pressure on the naira. This strain was also evident in the parallel market, where the naira declined by ₦43.50, closing at ₦1,536.00/$.
Although mid-month interventions by the CBN temporarily boosted market liquidity, they were not enough to restore balance, and the naira ended the quarter weaker. Over the quarter, the currency saw a mild depreciation at the NFEM window, while Nigeria’s external reserves dropped to $38.31 billion.
HOW CBN PLANNED TO STABILISE THE PARALLEL MARKET
In a separate move to stabilise the parallel market, the CBN directed Bureau de Change operators to purchase $25,000 from authorised dealer banks at the official rate. Nonetheless, the country’s reserves fell from a three-year peak of $43 billion, weighed down by ongoing debt servicing obligations and continued dollar sales.
Global economic headwinds added to the Naira’s woes. Markets were rattled as U.S. President Donald Trump introduced sweeping tariffs, sparking fresh volatility and leading to a downturn in stocks on Monday, April 7.
By the close of the quarter, the naira continued to face pressure despite additional dollar injections and slight recoveries.
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