Naira Continues Downward Trend Against Major Currencies
The Nigerian naira extended its losing streak against the United States dollar for the eleventh consecutive trading session on Wednesday, March 4, 2026, according to official data from the Central Bank of Nigeria. The currency closed at N1,387.09 per dollar in the Nigerian Foreign Exchange Market (NAFEM) window, representing a 0.2% depreciation from Tuesday's rate of N1,384.29.
Parallel Market Sees Significant Depreciation
In the parallel market, the naira experienced more substantial declines, with Bureau de Change operators reporting rates as high as N1,435 per dollar on Tuesday. This represents a significant drop from previous levels around N1,350, though market observers note the currency has remained within the projected band of N1,350 to N1,450 per dollar. The gap between official and parallel market rates has narrowed to approximately N13, indicating some convergence in the forex markets.
Currency traders reported selling the dollar at N1,435, the British pound at N1,890, and the euro at N1,630 on Tuesday. These rates showed substantial increases from Monday's levels of N1,400 for the dollar, N1,845 for the pound, and N1,596 for the euro.
Retail Banking Sector Also Affected
The depreciation extended to the retail banking sector, where GTBank's forex counter saw the naira fall by N12 to N1,385 per dollar, compared to N1,373 the previous day. The currency also weakened against other major currencies in the official market, closing at N1,855.10 per pound sterling (down from N1,842.22) and N1,615.27 per euro (down from N1,606.19).
External Reserves Show Modest Improvement
Despite the currency's continued weakness, Nigeria's gross external reserves showed a slight increase to $49.693 billion from $49.604 billion, according to the latest Central Bank data. The apex bank also reported that its gold reserves have grown to $3.5 billion following the delivery of responsibly sourced gold refined to London Bullion Market Association standards.
This development comes amid a sustained rally in gold prices, which have surged to over $5,000 per ounce in international markets. The increased gold reserves represent a diversification strategy for Nigeria's foreign exchange holdings.
Geopolitical Factors Influence Forex Market
Economic analyst Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, has highlighted how geopolitical tensions in the Middle East could impact Nigeria's foreign exchange inflows. While noting that higher crude oil prices could benefit Nigeria through increased export receipts and improved foreign exchange inflows, Yusuf cautioned that geopolitical shocks often lead to sharp, unpredictable movements in oil markets.
"Geopolitical shocks in the Middle East often push crude prices up sharply, sometimes by $5 to $15 per barrel within days," Yusuf explained. These fluctuations can create volatility in Nigeria's forex markets despite potential short-term benefits from higher oil revenues.
Market Stability Maintained Despite Depreciation
Market observers note that despite the naira's extended decline, the currency has avoided panic selling and maintained relative stability within expected parameters. The narrowing gap between official and parallel market rates suggests some normalization in forex market dynamics, though concerns remain about the currency's fundamental strength.
The Central Bank continues to monitor the situation closely as it implements measures to stabilize the foreign exchange market and support the naira's value against major global currencies.
