The Central Bank of Nigeria (CBN) defended the naira from losing significant strength in the foreign exchange market with about $669 million FX intervention in the first three month of 2025, a report from investment firm AIICO Capital Limited revealed.
The apex bank went ballistic with FX intervention throughout the first quarter of 2025 due to lower US dollar accretions and rising offshore demand for forex. To stem the negative tide in the parallel market, the CBN also directed Bureau de Change (BDCs) operators to purchase $25,000 from authorised dealer banks at the official rate.
In the course of the week, the nation’s external reserves fell sharply. The external reserves had peaked at a 3-year high of $43 billion before the trend reversed as a result of debt service payments and sustained US dollar injections into FX markets.
Still, the Naira experienced significant depreciation in March 2025 due to persistent demand pressure in the Foreign Exchange Market (NFEM).
Despite the CBN intervening with substantial dollar sales totaling $668.8 million, the naira weakened by 2.97% in March, closing at ₦1,536.82/$ from ₦1,492.49/$ at the start of the month, according to AIICO Capital Limited.
The market opened at ₦1,510/$, and demand remained robust, particularly from foreign portfolio investors and local corporates.
The parallel market mirrored this trend, depreciating by about ₦43.50/$ to ₦1,536.00/$. Liquidity improved midmonth with CBN interventions, but demand continued to outstrip supply.
In the final week, despite continued CBN dollar sales and a slight appreciation of bps, the naira remained under pressure.
On a quarterly basis, the Naira depreciated by bps at the NFEM window while the external reserves fell to $38.31 billion.
Analysts said despite weak foreign portfolio investor (FPI) flows, the CBN will likely sustain liquidity to stabilize the naira near-term. However, global risks—like US tariffs and retaliatory measures—may spur volatility and capital flight
