The naira depreciated to N1,391/$ on Wednesday, extending its recent slide as the U.S. dollar strengthened across global markets amid renewed concerns about inflation and geopolitical uncertainty.
Data from the Central Bank of Nigeria (CBN) showed the local currency weakened from N1,383.5/$ recorded on Tuesday, reflecting sustained pressure in the foreign exchange market.
The decline aligns with broader global trends, where a firmer dollar—driven by inflation expectations and risk-off sentiment—continues to weigh on emerging market currencies, including the naira.
CBN figures indicate that the naira traded within a band of N1,376 to N1,391.50 during the session, with a simple average rate of N1,387.22. The range underscores ongoing volatility in the market.
Market activity also softened. NFEM interbank turnover dropped to $55.7 million on Wednesday from $83.4 million the previous day, while the number of executed deals fell to 64 from 88, pointing to tighter liquidity conditions.
Nigeria’s external reserves edged lower to $49.57 billion on March 24, 2026, from $49.6 billion a day earlier, highlighting continued strain on the country’s FX buffers and its capacity to support the currency.
Globally, the U.S. dollar maintained its upward trajectory, with the dollar index rising 0.44% to 99.62 as investors reassessed inflation dynamics and geopolitical risks. The euro declined 0.39% to $1.1562, while the British pound fell 0.37% to $1.3362.
Stronger U.S. import price data—recording the sharpest increase in nearly four years in February—has reinforced expectations of persistent inflation and the likelihood of tighter monetary policy in the United States.
Geopolitical tensions, particularly involving Iran, also continue to shape market sentiment. Tehran is reviewing a U.S. proposal to end the ongoing conflict, but has raised sovereignty concerns over the Strait of Hormuz. While U.S. President Donald Trump signaled progress in talks, Iranian officials denied direct negotiations, sustaining uncertainty in global markets.
Despite the tensions, crude oil prices dipped 1.37% to $103.06 per barrel, while risk sentiment remained mixed across equities and fixed-income markets.
Other currencies weakened against the dollar, with the Japanese yen sliding to 159.46 per dollar and the Australian dollar dropping 0.63% to $0.6949.
Analysts attribute the naira’s sustained pressure to a mix of global and domestic factors, including dollar strength, capital flow constraints, and ongoing monetary tightening in advanced economies.
Lower interbank turnover suggests reduced liquidity, a factor that could further amplify exchange rate volatility in the near term.
Earlier in the week, the naira had weakened slightly to N1,383.5/$ on Tuesday from N1,383/$ on Monday, amid declining reserves and cautious market sentiment.
Meanwhile, the CBN has reiterated its medium-term inflation target of 6–9% as it advances toward a full inflation-targeting framework. The apex bank also projects that external reserves will strengthen in 2026, supported by improved inflows and structural reforms.
