Naira Experiences Biggest Fall In All Forex Markets Amid Renewed Dollar Demands

• The naira has experienced its biggest fall in the foreign exchange markets on Thursday, March 13, 2025
• The naira depreciated, trading at N1,549 to a dollar in the official window and N1,590 in the parallel market
• The development follows an accusation by Bureau de Change operators that banks are refusing to sell forex to them

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian currency hit its lowest level in 24 hours in the official Nigerian Foreign Exchange Market (NFEM) and the parallel market.

Currency dealers exchanged the dollar at N1,549, from N1,546, it traded the previous day.

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Naira hits lowest level in March

The current naira value is the biggest it has fallen in 24 hours and in March 2025, as demand for the US greenback heightened.

Experts have said the renewed volatility in the FX market is due to the absence of FX interventions by the Central Bank of Nigeria (CBN).

Earlier in the week, Bureau de Change (BDC) operators accused banks of refusing to sell dollars to them, fuelling speculations of hoarding by the lenders.

They believe this situation puts the naira in a precarious position in the foreign exchange markets.

In a chat with Legit.ng, Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), who raised the concern, said BDCs were grappling with a limited availability of forex.

He also said that some of the banks managing to sell wre offering unfavourable rates, and lower margins, creating business uncertainties. 

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He noted that these factors have combined to fuel currency substitution and speculative activities, leading to weaker naira. 

Gwadabe called upon the CBN to refine its actions in the retail foreign exchange market via BDCs to tackle these challenges effectively. 

Gap between official and black market rates widens

Meanwhile, on Thursday, March 13, 2025, data from the CBN showed that currency dealers quoted the dollar at a high of N1,560 and a low of N1,543 to a dollar before closing at N1,549.

The naira also weakened in the parallel market, trading at N1,590 per dollar on Thursday, March 13, 2025, from N1,595.

Consequently, the margin between the parallel and official rates widened to N41.

Experts ask Nigeria to discard Chatham House warning

The development comes amid calls by a UK think-tank, Chatham House, for Nigeria not to strengthen the naira as it has now become competitive, advice economists have asked the CBN and the Nigerian government to discard.

According to them, adhering to Chatham House’s counsel will fuel inflation further and create further disparity in the FX markets.

Janet Ogochukwu, economist and senior banker, said there is an urgent need for the apex bank to defend the local currency as that would reduce inflation in the country.

“One of the main drivers of inflation in the country is the exchange rate. Nigeria is an importing country and so needs foreign goods to survive. The call not to strengthen the naira does factor in local dynamics such as low production, and escalating living costs, which are squeezing households.”

She asked foreign advisors to come down from their high horses and face reality and also understand Nigeria’s peculiar circumstances.

Journalist and financial analyst, Ishaya Ibrahim, said Chatham House’s advice should not be discarded but examined to see if they have any vested interests in the naira’s fall.

“When these supposedly bigger economies dish out advice, especially currency advice, the concerned nations should not swallow them whole as they may be taking a bait to make them import dependent.

"Nigeria’s problems are a lack of productivity and high consumption. The economy is still largely import dependent, hence Chatham House’s warnings,” he said.

Naira bounces back in official window

Legit.ng earlier reported that after days of depreciation, the naira rebounded in the official Nigerian Foreign Exchange Market (NFEM) on Monday, March 10, 2025.

The naira was buffeted for most of last week following a dwindling reserve that depreciated by over $1 billion in February.

From March 4, 2025, through March 7, 2025, the naira shed about N45 against the US dollar, widening the gap between the parallel and official windows.

Proofreading by Nkem Ikeke, copy editor at Legit.ng.