The naira weakened further in March 2025, recording a 2.4% depreciation at the Nigerian Autonomous Foreign Exchange Market and a 2.6% decline in the parallel market compared to February.
According to Afrinvest’s latest Monthly Market Report titled “Analysing Global and Nigerian Economies & Financial Markets,” the exchange rate fell to ₦1,536.82/$ at NAFEM and ₦1,530.00/$ in the parallel market.
AIICO Capital, in its March macroeconomic market report, also confirmed that the naira faced significant demand pressure despite the Central Bank of Nigeria’s intervention of $668.8 million aimed at stabilizing the currency.
“The naira experienced significant depreciation in March 2025 due to persistent demand pressure in the (Nigerian) foreign exchange market.
“Despite the Central Bank of Nigeria intervening with substantial dollar sales totalling $668.8m, the naira weakened by 2.97 per cent m/m, closing at N1,536.82/$ from N1,492.49/$ at the start of the month,” stated AIICO Capital.
During the review period, demand for forex remained strong, driven largely by foreign portfolio investors and local corporates. According to AIICO Capital, this sustained pressure was reflected in the parallel market, where the naira depreciated by approximately ₦43.50/$, settling at ₦1,536.00/$.
While liquidity saw some improvement mid-month due to CBN’s interventions, demand consistently outpaced supply.
“In the final week, despite continued CBN dollar sales and a slight appreciation of 0.5 0.5 bps, the naira remained under pressure. On a quarterly basis, the naira depreciated by 7 bps q/q at the NFEM window. Meanwhile, external reserves fell by c.$110m to $38.31bn,” AIICO Capital further stated.
AIICO Capital projects that the Central Bank of Nigeria (CBN) will continue its liquidity support to stabilise the naira in the near term. However, the firm cautions that global headwinds—such as newly imposed U.S. tariffs and possible retaliatory actions—could heighten market volatility and trigger capital outflows.
The CBN has also acknowledged that recent global macroeconomic developments, including the U.S. tariff policies introduced by President Donald Trump, have begun to weigh on the naira.
In a statement signed by the Director, Financial Markets Department, Omolara Duke, the apex bank stated that recent movements in the foreign exchange market between April 3 and 4, 2025, made it inject about $197.71m through sales to authorised dealers on Friday into the FX market. The dollars sold between N1,519 and N1,595.20/$, according to analysts.
“In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity on Friday, April 4, 2025, with the provision of $197.71m through sales to authorised dealers. This measured step aligns with the Bank’s broader objective of fostering a stable, transparent, and efficient foreign exchange market.
“The CBN continues to monitor global and domestic market conditions and remains confident in the resilience of Nigeria’s foreign exchange framework, which is designed to adjust appropriately to evolving fundamentals.
“All authorised dealers are reminded to adhere strictly to the principles outlined in the Nigeria FX Market Code and to uphold the highest standards in their dealings with clients and market counterparties,” Duke said.
