Nigeria’s naira weakened marginally on Tuesday as external reserves slipped and global currency markets remained cautious, highlighting persistent pressure on the country’s foreign exchange position despite stable trading conditions.
The currency closed at N1,383.5 per dollar, compared with N1,383 on Monday, according to data released by the Central Bank of Nigeria. It traded within a band of N1,372 to N1,389 during the session, reflecting mild volatility in the Nigerian Foreign Exchange Market.
The movement comes as Nigeria’s external reserves fell to $49.6 billion as of March 23, 2026, from $49.8 billion recorded on March 18, based on figures published by the central bank. The decline signals continued strain on the country’s FX buffers, which remain a key support for currency stability.
Market activity pointed to moderate liquidity. The naira recorded a simple average exchange rate of N1,381.86 per dollar, while total interbank turnover reached $83.44 million across 88 deals, suggesting steady but cautious participation among banks and dealers.
While the currency has held within a narrow range in recent sessions, the combination of declining reserves and fragile external conditions continues to weigh on sentiment.
Global currency markets offered limited direction. Investors remained focused on geopolitical tensions and evolving monetary policy expectations in major economies, both of which are shaping capital flows into emerging markets such as Nigeria.
Attention has centred on tensions involving the United States and Iran, which have contributed to risk-sensitive positioning across markets. Currency moves, however, have been relatively muted compared with other asset classes.
The euro and British pound each gained about 0.1 percent, while the New Zealand dollar was little changed. The U.S. dollar held steady against the Japanese yen, supported by signals from the Bank of Japan pointing to possible future rate increases. The dollar index slipped 0.1 percent to 99.126.
Expectations around U.S. monetary policy are also shifting. Market pricing now shows a 30.2 percent probability of a 25 basis-point rate hike by the Federal Reserve in December, up from 8.2 percent a day earlier. Federal Reserve Governor Michael Barr said interest rates may need to remain elevated for longer as inflation stays above the 2 percent target.
Higher-for-longer U.S. rates typically support the dollar and tighten global financial conditions, adding pressure on emerging market currencies including the naira.
For Nigeria, external factors intersect with domestic constraints, particularly the pace of reserve accumulation and the ability to sustain FX liquidity. Movements in oil prices, a major source of export earnings, alongside capital flows and remittance inflows, remain critical to the currency outlook.
Earlier this week, in a policy communication issued as part of its monetary framework update, the Central Bank of Nigeria said it is targeting inflation of 6 percent to 9 percent over the medium term as it transitions toward a full inflation-targeting regime. The bank said the shift is aimed at strengthening policy credibility and anchoring macroeconomic stability.
The CBN also projected that external reserves will rise to $51.04 billion in 2026, up from $45.01 billion in 2025, supported by improved inflows and structural reforms in the foreign exchange market.
For now, the naira’s stability within a tight range masks underlying vulnerabilities. Reserve trends and global financial conditions remain decisive factors, with investors watching closely for clearer signals on the trajectory of both.