The Nigerian naira weakened slightly to N1,387 per dollar on Tuesday, up from N1,386.75/$ recorded in the previous session, according to data released by the Central Bank of Nigeria (CBN). The modest depreciation comes as Nigeria’s foreign reserves declined to $49.29 billion by the end of March, highlighting continued pressure on the domestic currency despite stable global currency movements.
Trading activity in the official foreign exchange window remained moderate, with a total turnover of $30.95 million across 44 deals. Intra-day trading ranged between N1,385.5/$ and N1,388/$, averaging N1,386.69/$. Analysts say this steady decline reflects persistent but controlled pressure on the naira, alongside gradual drawdowns in Nigeria’s external reserves.
The current exchange rate movement comes amid ongoing foreign exchange reforms by the CBN, which have adopted a more market-driven approach since mid-2023. While these reforms have improved transparency and narrowed the gap between official and parallel market rates, they have also exposed the naira to market-driven volatility, resulting in periodic fluctuations in the exchange rate.
Global currency markets remained relatively stable in contrast, with the U.S. dollar holding steady as safe-haven demand eased following tensions in the Middle East. The dollar index fell slightly by 0.03% to 99.70, while the euro and sterling gained marginally. The Japanese yen also strengthened, recovering from previous lows due to improved business sentiment in Japan, signaling that the naira’s weakness is largely domestic in origin.
The CBN has projected that Nigeria’s foreign reserves could reach $51 billion by the end of 2026, supporting macroeconomic stability and restoring market confidence. The apex bank links the reserve recovery to increased domestic refining capacity, particularly the Dangote Refinery’s planned output expansion to 700,000 barrels per day, with a long-term target of 1.4 million bpd. Analysts say this strategy could help buffer the naira against external shocks while supporting sustainable economic growth.
source: nairametrics