March 31, 20250
The Nigerian naira rate against the US dollar worsened in March, across the foreign exchange markets despite significant FX interventions in the official and parallel markets.
Though the Central Bank of Nigeria (CBN) pumped more than $1 billion official window to oil the forex market inflows, the naira still lost 3%,
Increased demand for US dollar drove up the exchange rate equation, and this made the naira to struggle unsuccessfully against the dollar. The exchange rate trend witnessed in the official window suggested that the naira fortune would have worsened without aggressive FX interventions in the month of March.
However, the official window was relatively stable last week supported by improved dollar supply from the CBN. Early in the week, the CBN sold $41.6 million at rates between N1,527.50 and N1,531, helping to stabilised exchange rate fluctuation.
CBN injected an additional $27.9 million by midweek, making the NGNUSD pair trading within a narrow range, AIICO Capital Limited reported. Despite minor fluctuations, the exchange rate remained stable due to slight increased demand for dollars.
On Friday trading dragged between N1,520.00 and N1,542.00, with the Naira appreciating marginally by 0.5bps week on week to close at N1,536.82.
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According to TrustBanc Financial Group Limited, the CBN sold N1.03 billion in March to support the market, despite this the official exchnage rate depreciated by 3.00% to N1536 and parallel market rate fell by 3.23% to N1550, bringing its year-to-date gain to 0.09% and 6.13% in the official and parallel markets, respectively.
The nation’s FX reserves decreased for the second consecutive week by $913.14 thousand to $38.33 billion. In the forwards market, the naira rates increased across contracts. The 1-month FX forward contract appreciated by +0.5% to N1,572.44, the 3-month contract rose by +1.3% to N1,635.09, the 6-month contract climbed by+2.4% to N1,727.16 and 1-year contract rallied by +4.8% to N1,899.27 per dollar.
Market analysts said they expect the CBN to continue supporting market liquidity amid weak FPI participation in the FX market. This will help maintain the naira’s stability at current levels in the short term.
