strictly to the principles outlined in the Nigeria FX Market Code and to uphold the highest standards in their dealings with clients and market counterparties,” Duke said.
In the past week, the naira recorded heightened volatility at the interbank Nigerian Foreign Exchange Market. Early in the week, it remained relatively stable, trading between N1,525–N1,535/$ on the back of consistent CBN support and moderate offshore inflows. However, by midweek, there was a sharp reversal as offshore demand surged, compounded by weakened oil prices following OPEC+’s supply hike and global risk-off sentiment driven by Trump’s tariff announcements.
This led to strong FX demand pressure and limited supply, pushing the naira to as high as N1,570/$. Despite CBN’s intervention, the naira depreciated by 1.97 per cent w/w to close at N1,567.02/$, and foreign reserves declined by $149m to $38.15bn.
Amid the external pressure on the naira, analysts at Afrinvest said the pressure may be compounded due to the stoppage of the naira-for-crude initiative. It was projected that with the end of the initiative, FX demand would shoot up, as refineries join the “FX-seeking queue while PMS importers source more products from abroad. Against this backdrop, we expect the naira to remain pressured near-term, barring any unforeseen shocks.”
Cardinalstone, in its macroeconomic update on Monday, also affirmed that the Nigerian FX market has been negatively affected by offshore investors’ flight to safety as increasing domestic dollar demand put pressure on the naira (1-month return of -8.6% and YtD of -5.8%).
“Some of the concerns relate to the risk of the government not meeting its revenue target and the higher deficit that could imply. Speaking to this risk, crude production declined to c. 1.67 mbpd in February (vs. 1.74 1.74mbpd in January) amidst the material contraction in oil price (down by 14.2% YtD),” CardinalStone said.
Commenting on the global ripple effects, former Zenith Bank chief economist Marcel Okeke warned that the Trump-led tariff war could trigger inflation globally, with Nigeria particularly vulnerable due to its import dependence. “We’re likely to see an uptick in imported inflation,” he said.