Naira continues decline against major currencies as forex crisis deepens

The Nigerian currency, the naira, continued its downward trend against the U.S. dollar and other major foreign currencies at the official and parallel foreign exchange markets on Tuesday, March 11, 2025.

The ongoing depreciation has raised concerns among financial analysts and businesses as Nigeria struggles with forex liquidity challenges.

According to data from the Central Bank of Nigeria (CBN), the naira weakened further to N1,536.15 per U.S. dollar at the official exchange window, marking a ₦6 loss from N1,530.15/$1 recorded on Monday, March 10, 2025.

In the parallel (black) market, the situation remains concerning as the naira traded at N1,580/$1, reflecting a N5 loss compared to the previous day’s exchange rate of N1,575/$1.

Currency traders in Lagos and Abuja confirmed the continued shortage of dollars, which has fueled further depreciation.

The Nigerian currency also weakened against the British pound sterling, trading at N2,010/£1, a loss of N10 from the previous day’s rate of  N2,000/£1. Likewise, against the Euro, the naira slumped to N1,665/€1, marking a N15 depreciation from N1,650/€1 recorded a day earlier.

However, the Canadian dollar remained stable at N1,200/CA$1, showing no significant changes in exchange rates compared to the previous day.

Financial experts attribute the persistent depreciation of the naira to several factors, including:

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Dollar Scarcity: Limited forex inflows from oil exports and foreign investments have continued to strain Nigeria’s foreign reserves.

High Demand for Foreign Exchange: Increased demand for dollars by businesses, importers, and travelers is further pressuring the local currency.

Speculative Trading: The uncertainty surrounding forex policies has led to speculative buying of foreign currencies, exacerbating the naira’s decline.

According to Dr. Muda Yusuf, an economist and former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), “The continuous depreciation of the naira reflects underlying structural issues in the economy. Urgent measures, including forex market reforms and increased dollar supply, are necessary to stabilize the currency.”

The Central Bank of Nigeria has implemented several measures, including unifying exchange rates and injecting dollars into the market to curb volatility. However, analysts believe more strategic interventions, such as improving export revenues and attracting foreign direct investment (FDI), are needed to strengthen the naira.

The steady decline of the naira continues to pose challenges for businesses, importers, and households, driving up inflation and reducing purchasing power.

As Nigeria grapples with its forex crisis, all eyes are on policymakers to implement lasting solutions to restore stability in the exchange market.

Market watchers and economic experts will closely monitor the coming days to see whether the naira finds stability or continues its downward spiral.