Samson Echenim 
The Central Bank of Nigeria (CBN) deployed approximately $669 million in foreign exchange (FX) interventions during the first quarter of 2025 to shield the naira from further depreciation, according to a report by investment firm, AIICO Capital Limited.
Amid dwindling dollar inflows and surging offshore demand for foreign exchange, the apex bank ramped up its efforts throughout the quarter. In a bid to stabilise the parallel market, the CBN also instructed Bureau de Change (BDC) operators to purchase $25,000 from authorised dealer banks at the official exchange rate.
Despite these interventions, the country’s external reserves took a hit, reversing from a three-year peak of $43 billion due to debt service obligations and continued dollar sales to support the naira.
Nevertheless, the local currency came under significant pressure in March 2025, weakening in response to sustained demand in the Nigerian Foreign Exchange Market (NFEM). The naira depreciated by 2.97% over the month, sliding from ₦1,492.49/$ to ₦1,536.82/$ despite CBN’s dollar injections totalling $668.8 million.
The market opened the month at ₦1,510/$, with demand remaining elevated—particularly from foreign portfolio investors and local corporations. The parallel market reflected similar strain, with the naira falling by ₦43.50 to close at ₦1,536.00/$.
Although mid-month liquidity saw a temporary boost from CBN interventions, demand continued to outweigh supply. By the end of the quarter, the naira remained under pressure, even with additional dollar sales and minor gains. On a quarterly basis, the currency posted a modest depreciation at the NFEM window, while external reserves declined to $38.31 billion.
Analysts suggest that despite subdued inflows from foreign portfolio investors, the CBN is likely to maintain its liquidity support to prevent further volatility. However, they caution that global headwinds—such as U.S. tariffs and potential retaliatory actions—could exacerbate capital flight and trigger fresh instability in the FX market.
