Naira Continues Decline Against US Dollar in Foreign Exchange Markets
The Nigerian naira extended its depreciation against the United States dollar on Monday, March 2, 2026, closing at N1,378.02 per dollar at the Nigerian Foreign Exchange Market (NAFEM). This represents a significant drop of N14.63, or 1.07%, compared to the previous Friday's rate of N1,363.39 per dollar.
Parallel Market Also Sees Naira Slip
In the unofficial or black market, the naira similarly weakened, reflecting persistent demand pressures that outpace available supply. A Bureau de Change trader, Abudullahi, reported buying the dollar at N1,374 and selling at N1,395, the British pound at N1,840 and selling at N1,875, and the euro at N1,590 and selling at N1,625.
The naira also lost ground against other major currencies, trading at N1,846.14 per British pound, up from N1,836.49, and N1,612.98 per euro, down from N1,609.22 in the prior session.
Central Bank Intervention Fails to Stem Decline
The Central Bank of Nigeria intervened by selling $200 million to bolster foreign exchange supply, as part of broader February operations that included selling $225 million and purchasing $261.8 million. Despite these measures, market pressures persisted due to high dollar demand exceeding supply.
Coronation Merchant Bank's research indicated that total forex inflows into the official window rose to $1.07 billion last week, up from $648.2 million the week before, suggesting improved liquidity. However, analysts note the exchange rate remains within the projected band of N1,350 to N1,450 per dollar, advising against panic.
Expert Insight on Geopolitical Impacts
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), commented on the potential effects of the ongoing conflict between the US, Israel, and Iran. He stated that while the naira could strengthen from higher oil export earnings, boosting reserves and forex liquidity, geopolitical instability and capital outflows might offset these gains, leaving the net impact uncertain.
Forex Reserves Reach 13-Year High
In a contrasting development, Nigeria's foreign exchange reserves surged to $48.5 billion, the highest level in nearly 13 years, according to Central Bank data from February 17, 2026. This marks a 6.45% increase from $45.56 billion recorded on January 1, 2026, with reserves growing by $2.94 billion year-to-date, signaling renewed strength in the country's external position.
The continued depreciation of the naira highlights ongoing challenges in Nigeria's forex market, despite interventions and rising reserves, as demand pressures and external factors like geopolitical tensions influence currency stability.
