Naira Weakens to N1,380.58 Per Dollar as Nigeria's Reserves Decline to $49.48 Billion
Nigeria's currency, the naira, closed the week on a weaker note at the official foreign exchange market, settling at N1,380.58 per dollar on Friday. This represents a weekly depreciation of N21.68 or 1.57 per cent from the previous week's rate of N1,358.90, highlighting persistent economic pressures despite intermittent daily gains. Although the naira appreciated by N3.30 from Thursday to Friday, the broader trend remained negative, with the currency opening the week at N1,388.38 on Monday.
Parallel Market Gap Widens Amid FX Inefficiencies
Pressure on the naira was also evident in the parallel market, where the currency weakened further to N1,415 per dollar on Friday, marking a N15 drop compared to N1,400 recorded a week earlier. Daily, the naira slipped by N3 from Thursday's rate of N1,412. The divergence between official and parallel market rates widened to N35 from N29 the previous week, underscoring ongoing inefficiencies in the foreign exchange market and sustained demand for foreign currency outside official channels.
External Reserves Fall for Ninth Consecutive Day
A key factor driving the naira's weakness is the continued decline in Nigeria's external reserves, which serve as a buffer for currency stability. The reserves fell for the ninth consecutive day to $49.48 billion as of March 26, 2026, marking a drop of $540 million or 1.08 per cent from $50.02 billion recorded on March 11. This steady depletion has limited the ability of the Central Bank of Nigeria to effectively defend the naira, contributing to increased volatility in the foreign exchange market.
CBN Introduces Reforms to Boost FX Liquidity and Transparency
In response to mounting pressure, the Central Bank of Nigeria has rolled out new measures aimed at improving liquidity and enhancing market efficiency. One of the most significant changes is the removal of the cash pooling requirement for International Oil Companies (IOCs). Previously, authorised dealer banks were required to retain 50 per cent of export proceeds, while the remaining portion could only be repatriated after 90 days. Under the revised framework, IOCs can now repatriate 100 per cent of their export earnings immediately, provided proper documentation is submitted.
The Central Bank of Nigeria stated that this policy aligns with current market realities and is expected to boost foreign exchange inflows, improve competitiveness, and attract foreign investors. Additionally, the central bank introduced fresh guidelines for International Money Transfer Operators (IMTOs) to improve transparency in diaspora remittances. Under the new directive, all remittance inflows must be processed through designated naira settlement accounts within the banking system.
Operators are required to price transactions using real-time rates from Bloomberg BMatch. At the same time, authorised dealer banks are now permitted to transfer funds across banks and licensed Bureau De Change operators to improve liquidity distribution. These new rules, set to take effect on May 1, 2026, also reinforce strict compliance with anti-money laundering and counterterrorism financing regulations.
Outlook: Policy Moves Versus Market Realities
The latest developments highlight the delicate balance between policy interventions and market forces in Nigeria's foreign exchange landscape. While the Central Bank of Nigeria continues to deploy regulatory measures to stabilise the naira, the persistent decline in reserves and widening parallel market gap suggest that challenges remain. Analysts believe sustained foreign exchange inflows, improved investor confidence, and disciplined market operations will be critical in determining whether the naira can regain stability in the coming weeks.
Earlier reports indicated that the naira fell against the US dollar in the Nigerian Foreign Exchange Market (NAFEM) on Wednesday, March 25, dropping N4.07 or 0.29% to N1,386.70 per dollar from Tuesday's N1,382.63 per dollar. This decline was driven by forex demand pressures amid limited supply from the Central Bank of Nigeria and other sources, with the central bank recently not conducting any foreign exchange sales to eligible financial institutions, where Bureau de Change operators can access $150,000 weekly.
