Naira weakens to N1,383.5/$ as external reserves drop to $49.6 billion

The Naira weakened slightly to N1,383.5/$ on Tuesday, compared to N1,383/$ recorded on Monday, amid declining external reserves and cautious sentiment in global currency markets.

Data from the Central Bank of Nigeria (CBN) showed that the currency traded within a band of N1,372/$ to N1,389/$ during the session.

The marginal depreciation reflects ongoing pressure on the foreign exchange market as reserves continue to trend downward.

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**What the data is saying **

Market activity showed moderate liquidity, with stable but cautious trading conditions in the Nigerian Foreign Exchange Market (NFEM).

• The naira recorded a simple average exchange rate of N1,381.86/$ during Tuesday’s trading session.
• Total interbank turnover stood at $83.44 million across 88 deals.
• Nigeria’s external reserves declined to $49.6 billion as of March 23, 2026, from $49.8 billion recorded on March 18.
• The drop in reserves signals sustained pressure on the country’s foreign exchange buffers.

The data suggests that while the naira remains relatively stable, underlying pressures from declining reserves persist.

More insights

Global currency markets remained cautious amid geopolitical tensions and shifting monetary policy expectations.

• Investors are closely monitoring developments in the ongoing tensions between the United States and Iran, which continue to influence market sentiment.
• The euro and British pound posted marginal gains of 0.1%, while the New Zealand dollar remained flat.
• The U.S. dollar held steady against the Japanese yen, supported by signals from the Bank of Japan on possible future rate hikes.
• The U.S. dollar index dipped slightly by 0.1% to 99.126, reflecting muted global currency movements.

Market activity in currencies remained subdued, even as other asset classes reacted more sharply to geopolitical developments.

Shifts in U.S. monetary policy expectations are also shaping global currency dynamics and influencing emerging markets like Nigeria.

• The probability of a 25-basis-point rate hike by the U.S. Federal Reserve in December has risen to 30.2%, up from 8.2% a day earlier.
• Federal Reserve Governor Michael Barr indicated that interest rates may remain elevated for longer due to persistent inflation above the 2% target.
• Geopolitical tensions in the Middle East continue to pose risks to global economic stability.
• Movements in global oil prices and capital flows remain key factors affecting Nigeria’s exchange rate outlook.

**What you should know **

Earlier this week, CBN had announced a medium-term inflation target of 6–9 per cent as it accelerates its transition to a full inflation-targeting monetary policy framework.

The apex bank expects reserve levels to continue rising in 2026, supported by both external inflows and domestic structural changes.

• The CBN projects external reserves of $51.04 billion in 2026, up from $45.01 billion in 2025.

In December 2025, Nairametrics reported that reserves had climbed to $45 billion, representing a six-year high at the time.

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