The Nigerian currency came under renewed pressure on Tuesday as the naira weakened by approximately 2.48 percent in early trading, reflecting rising demand for foreign exchange and broader global economic uncertainties.
Data from the Nigerian Foreign Exchange Market showed the dollar opened at an average rate of ₦1,388.38, a decline of ₦34.48 from the ₦1,353.90 recorded at the close of the previous week.
The depreciation occurred despite the introduction of the Central Bank of Nigeria’s Electronic Foreign Exchange Matching System (EFEMS), a mechanism designed to improve transparency and efficiency in the currency market.
While intraday volatility remained relatively contained, rates briefly spiked to as high as ₦1,395.00 before moderating.
Market analysts attribute the sudden surge in dollar demand to end-of-quarter obligations by corporations, coupled with a temporary slowdown in autonomous foreign exchange inflows.
These factors have placed short-term pressure on the naira, even as policymakers attempt to stabilise the market.
The currency movement also coincides with a slight dip in Nigeria’s external reserves.
READ ALSO: Naira Falls to ₦1,560 in Black Market, Gains in Official Trading
After reaching a 13-year high of $50.45 billion in February 2026, reserves have since eased to $49.78 billion as of mid-March, according to central bank data.
Although global oil prices remain favourable—with Bonny Light crude trading above $100 per barrel—analysts note that domestic production challenges and existing crude-backed financial obligations have limited the immediate inflow of foreign exchange into the economy.
External factors are also playing a role. Heightened geopolitical tensions in the Middle East have contributed to shifts in global capital flows, further complicating Nigeria’s foreign exchange outlook.
For businesses and households, the weakening naira translates into rising costs for imports and increased pressure on purchasing power.
As the quarter draws to a close, market watchers say the direction of the currency will depend on the pace of inflows, policy interventions, and stability in global financial conditions.