Naira Weakens to ₦1,386.72 as Major Banks Adjust Dollar Selling Rates
The Nigerian naira continued its downward trajectory against the US dollar for the second consecutive trading session, closing at ₦1,386.72 per dollar on Tuesday, March 31, 2026, according to fresh data released by the Central Bank of Nigeria. This represents a slight decline from the previous day's rate of ₦1,383.58, highlighting persistent pressure in the foreign exchange market.
Commercial Banks Respond to Weakening Currency
In response to the deteriorating naira value and tightening liquidity conditions, major commercial lenders including Access Bank, Zenith Bank, and United Bank for Africa have adjusted their dollar selling rates. This move reflects the ongoing challenges in Nigeria's foreign exchange landscape, where demand for foreign currency continues to outpace available supply.
The persistent demand stems primarily from import payments and offshore obligations, creating sustained pressure on the naira despite various interventions by monetary authorities.
FX Liquidity Plummets Dramatically
Market activity revealed a startling contraction in foreign exchange liquidity, with the number of interbank foreign exchange deals plunging by 62 percent within a single 24-hour period. Transactions fell to just 114 deals, indicating significantly reduced participation and limited dollar availability in the official window.
Further data from the Central Bank showed that interbank deal volumes dropped sharply from 115 at the beginning of the week to merely 44 deals, underscoring a deepening scarcity of foreign currency. Turnover also experienced a steep decline, falling to $30.953 million from $145.291 million recorded on Monday.
This dramatic contraction suggests that both banks and corporate entities are struggling to access sufficient foreign currency, a development that continues to undermine the naira's stability and complicates Nigeria's economic recovery efforts.
CBN Interventions Prove Insufficient
Despite multiple interventions by the Central Bank of Nigeria, the naira has remained under significant pressure. Last week alone, the apex bank injected a total of $95 million into the market to ease demand pressures and support liquidity, including a $65 million sale on Friday specifically aimed at stabilizing the currency.
However, these measures have produced limited impact as demand continues to substantially outpace supply in the foreign exchange market. Financial analysts note that sustained pressure on the naira reflects deeper structural challenges within Nigeria's economy, including high import dependency and strong demand for the US dollar as a safe-haven asset during periods of economic uncertainty.
Parallel Market Shows Relative Stability
In the parallel market, the naira demonstrated relative stability, closing at ₦1,420 per dollar. However, currency traders caution that this narrow movement reflects tightening liquidity rather than improved market fundamentals. Reduced supply in both official and unofficial markets is keeping exchange rates elevated across all trading platforms.
Global Oil Shock Compounds Domestic Challenges
External factors are further complicating Nigeria's foreign exchange challenges. Global oil prices surged sharply in March, with Brent crude oil rising to $119 per barrel, approaching recent highs according to a report by MarketForces Africa.
The price spike follows escalating geopolitical tensions and supply disruptions linked to US-Israel air strikes on Iran, which have affected key oil shipping routes worldwide. As oil prices climb, countries across the globe are implementing emergency measures to manage energy costs, while Nigeria faces the dual challenge of benefiting from higher crude prices while simultaneously grappling with foreign exchange instability driven by global uncertainty.
Broader Currency Weakness Evident
The naira's weakness extends beyond the US dollar pairing. In the official market, the currency also depreciated against both the British pound and the euro. It fell by N7.61 against the pound to close at N1,859.99/£1, down from the previous day's N1,852.38/£1, and declined by N1.58 against the euro, settling at N1,611.49/€1 from N1,609.86/€1.
Overall, the naira's latest slide highlights persistent vulnerabilities in Nigeria's foreign exchange market, with liquidity constraints, global economic shocks, and strong dollar demand continuing to shape currency movements. The situation presents ongoing challenges for policymakers, businesses, and ordinary Nigerians who rely on stable exchange rates for economic planning and international transactions.
