Victor EzejaThe Nigerian naira has continued to depreciate against the dollar at the foreign exchange (FX) market, despite efforts by the Central Bank of Nigeria (CBN) to boost FX liquidity.
Data from the CBN showed that the naira began the new week on Monday, 7 April 2025 with a significant depreciation as the official exchange rate hit a new low of N1,629 per dollar. This means the naira fell by N29 or 1.81 per cent when compared to N1,600 per dollar recorded at the close of trading on Friday, 4 April 2025.
Join our WhatsApp ChannelThe intra-day highs and lows were reported as N1,655 and N1,590 to the dollar, respectively.
The exchange rate has weakened by N92 or 5.99 per cent in the first seven days of April after closing March at N1,537/$1.
The CBN had on Friday, 4 April 2025, injected $197.71 million into the foreign exchange market, as part of its ongoing commitment to ensuring adequate liquidity and stability.
Being the first intervention of the CBN in the FX market this year, the move was to halt the slide in the naira.
According to a statement by the Director of CBN’s Financial Markets Department, Dr Omolara Omotunde Duke, the dollar sold to authorised dealers was in line with the apex bank’s commitment to ensuring adequate liquidity and supporting orderly market functioning.
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However, the local currency further weakened on Monday. This is also the lowest level the naira has reached since 2 December 2024, when it closed at N1,660/$1.
The continued depreciation of the naira comes days after the United States President Donald Trump announced new trade tariffs on goods imported into the country from different economies.
On the home front, analysts observed that the recent depreciation of the naira was caused by a surge in foreign exchange demand, which is putting pressure on the local currency.
In a note, analysts at Afrinvest Securities cited the suspension of the Naira-for-Crude initiative as a driver of increased FX demand, with local refineries now competing with fuel importers for dollars.
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Prime Business Africa reports that the naira-for-crude deal, launched by the Federal Government on 1 October 2024, made it possible for local refineries, like the Dangote Petroleum Refinery, to buy crude oil with naira rather than US dollar. This policy sought to improve petroleum product availability in Nigeria, lower transaction costs, and lessen pressure on the naira.
Discussions over a possible renewal of the policy are still ongoing, as the initial six-month period agreed earlier has ended on 31 March 2025.
The suspension of the deal forced Dangote refinery, which has become a major supplier across the country, to stop selling refined petroleum products in naira, which also led to a sharp rise in prices of petrol within the last one week.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
