Naira Falls as FX Interventions Fail to Redirect Spot Rate
The naira tumbled against the US dollar across foreign exchange markets on Tuesday despite extended intervention by the Central Bank of Nigeria (CBN). US dollar demand heated up the currency market amidst a 25% decline weekly forex inflows in the official window.
The Nigerian foreign exchange market experienced significant demand pressure today despite the Central Bank of Nigeria’s (CBN) intervention, which saw the sale of over $44.75 million at rates between N1,522.70 and N1,531, AIICO Capital Limited said in a note to investors.
The US dollar to naira pair fluctuated between N1,522.70 and N1,549.50, leading to a 32 basis points depreciation of the naira, which closed at N1,532.93, the investment bank said in its note.
Data showed that FX inflows into the Nigerian autonomous foreign exchange window declined by 25% week on week to settle at $1 billion, from $1.34 billion in the comparable weak.
Total FX sales by CBN increased by $183.20 million on Friday, bringing the total US dollar volume supplied for the week to $543.20 million, TrustBanc Financial Group Limited said in an update.
The CBN has sold about $590 million in six days to banks to curb pressures on the Naira despite slowdown in FX accretion into the nation’s external reserves. In the parallel market, the Naira ended the day at ₦1,580.
According to information from the CBN, the gross external reserves had reduced to about $38.4 billion after successive interventions sales to authorised dealer banks amidst dwindling inflows from oil exports.
Oil prices remained near a two-week high on Tuesday as rising tensions in the Middle East raised concerns about potential supply disruptions. Additionally, China’s plans for further economic stimulus supported expectations of stronger fuel demand in the world’s second-largest economy.
However, gains were limited as markets awaited the outcome of discussions between U.S. President Donald Trump and Russian President Vladimir Putin regarding a possible Ukraine ceasefire, which could ease sanctions on Russian fuel exports.
Brent crude rose 25 cents, or 0.4%, to $71.32 per barrel while U.S. West Texas Intermediate (WTI) crude climbed 17 cents, or 0.3%, to $67.75. A slowdown in crude oil prices would put pressure on Nigeria’s fiscal performance, tracking below 2025 budget estimates while output continues to fluctuate.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported a 3.77% month on month decline in Nigeria’s crude oil production to 1.67 million barrels per day (mbpd) – including condensates- in February 2025, down from 1.74mbpd in January.
The decline was broad-based across key terminals, with Forcados (-12.53%), Bonny (-21.81%), Qua Iboe (- 7.63%), Escravos (-13.47%), Brass (-16.64%), and Odudu (-11.26%) all recording lower output.
The contraction was driven by operational disruptions, pipeline leakages and crude theft. Despite peaking at 1.7mbpd during the month, Nigeria’s production remains below its 1.5mbpd OPEC quota. Looking ahead, government efforts to curb oil theft and improve infrastructure could support a gradual recovery in output.
Gold surged 1% to a new record high on Tuesday, remaining above the $3,000 mark as heightened Middle East tensions and trade uncertainties driven by Trump’s tariff policies increased demand for the safe-haven asset.
Spot gold peaked at $3,038.26 per ounce before settling at $3,031.22. Prices first surpassed $3,000 on March 14. The Organisation for Economic Co-operation and Development (OECD) cautioned that U.S. tariffs could hinder economic growth in the U.S., Canada, and Mexico, while also dampening global energy demand. #Naira Falls as FX Interventions Fail to Redirect Spot Rate Nigerian Exchange Falls by N73bn as Investors Dump VFD, OANDO
