CBN Adjusts Exchange Rates as Naira Depreciates Slightly in Official Market, Gains in Black Market
- The Nigerian currency, the naira traded low in the official foreign exchange on Monday, March 17, 2025
- The local currency depreciated in the official FX market, closing at N1,549 to a dollar, relative to N1,548 on Friday, March 14, 2025
- However, the naira reversed its losses in the parallel segment of the official market, trading at N1,590 from N1,600
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian naira depreciated slightly in the official Nigerian Foreign Exchange Market (NFEM) on Monday, March 18, 2025.
Compared to Friday, March 14, 2025 rate, the naira fell to N1,549 to a dollar.
Source: Getty Images
Naira appreciates in the black market
Currency dealers quoted the dollar at a high of 1,552 to a dollar and a low of N1,512.
However, the naira reversed its losses in the parallel market, trading at N1,590 from N1,600 it traded the previous day.
Legit.ng earlier reported that the uncertainty of the ongoing tariff war between the United States and some countries has caused foreign exchange to exit Nigeria, leading to a two-week depreciation of the naira.
The development prompted the Central Bank of Nigeria (CBN) to intervene in the FX market last week, selling about $500 million to boost supplies.
The naira falls in official and black markets
However, the naira continued to depreciate weekly by N55 to N1,600 per dollar in the parallel market, the lowest in five weeks since February 5, 2025.
In the Nigerian Foreign Exchange Market (NFEM), the Nigerian currency depreciated by N6 to N1,548 per dollar.
The raging tariff war triggered uncertainty in the global economy as Canada, Mexico, China and the EU retaliated against President Donald Trump’s tariff hikes.
Investors withdraw FX from the Nigerian economy
Experts say the fear of naira depreciating led to panic sell-offs, compounding the demand pressure in the FX market.
According to data from the Nigerian Exchange Limited (NGX), foreign investment outflow from the stock market exceeded inflow by 78% in January.
The market saw an N45.85 billion outflow against the foreign inflow, which stood at N25.66 billion.
While the foreign outflow rose by 13.2% to N45.85 billion in January this year from N40.49 billion in December last year, foreign inflow dropped marginally by 2.3% in January 2025 from N26.26 billion in December 2024.
Findings showed that the upward swing in FX outflow led to dollar scarcity, triggering continuous naira depreciation in NFEM and the parallel market.
As a result, from February 26 to March 14, the naira depreciated by 7.4% in the parallel market to N1,600 from N1,490.
FX traders blame banks
Also, the naira fell in the official market during the two weeks by 3.3% to N1,5480 per dollar from N1,499.
Legit.ng earlier reported that the sharp fall of the naira was attributed to a weak dollar supply.
Bureau de Change (BDC) operators in Nigeria accused commercial banks of failing to sell foreign exchange to them.
They believe the situation puts the naira in a precarious position in the foreign exchange markets.
Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON) who raised the concern said BDCs are grappling with limited availability of forex in a chat with Legit.ng.
He also said that some of the banks managing to sell are offering unfavourable rates, and lower margins which is creating business uncertainties.
Source: Getty Images
He noted that these factors have combined to fuel currency substitution and speculative activities, weakening the naira.
Naira experiences the biggest fall in all forex markets
Legit.ng earlier reported that the Nigerian currency hit its lowest level in 24 hours in the official Nigerian Foreign Exchange Market (NFEM) and the parallel market.
Currency dealers exchanged the dollar at N1,549, from N1,546, which it traded the previous day.
The current naira value is the biggest it has fallen in 24 hours and in March 2025, as demand for the US greenback heightened.
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Source: Legit.ng
