Naira Slips Again: Why the Nigerian Currency is Depreciating Despite CBN Intervention

 

Despite high-level promises and strategic market injections from the Central Bank of Nigeria (CBN), the Nigerian Naira has continued its downward slide against the US Dollar. As of Tuesday, February 24, 2026, the local currency faced fresh pressure in both the official and parallel markets, raising questions about the long-term effectiveness of recent monetary policies. While the Presidency remains optimistic about a rebound to N1,000/$, current market data suggests a more turbulent path ahead.

​The Current Market Reality: NAFEM vs. Parallel Market

​On Tuesday, the Naira closed at the Nigerian Autonomous Foreign Exchange Market (NAFEM) with a noticeable dip. Data from FMDQ Securities Exchange showed that the Naira dropped from its previous closing rate, struggling to maintain the stability seen earlier in the month.

​1. The Official Window (NAFEM)

​In the official window, the Naira traded at a high of N1,450/$ before settling at a lower closing rate. This volatility persists despite the CBN’s efforts to increase liquidity by selling forex directly to Bureau De Change (BDC) operators and authorized dealers.

​2. The Parallel (Black) Market

​In the informal sector, the situation remains even more grim. The "black market" rate continues to hover between N1,500 and N1,550/$, driven by high demand from importers and individuals seeking "safety" in the dollar. This widening gap between the official and parallel rates remains a major concern for economic analysts.

​Why the CBN Intervention Isn't Stopping the Slide

​The CBN has recently sold millions of dollars to BDC operators at subsidized rates to saturate the market. However, the Naira continues to depreciate due to several underlying factors:

• ​Excessive Demand: The demand for dollars for school fees, medical bills, and manufacturing inputs far outweighs the current supply being injected by the central bank.
• ​Liquidity Squeeze: While the CBN is intervening, the volume of forex available in the system is still considered "a drop in the bucket" compared to what is needed for a full market recovery.
• ​Speculative Trading: Many market players are still betting against the Naira, holding onto dollars in anticipation of further depreciation, which creates an artificial scarcity.

​The Tug-of-War: Presidency Optimism vs. Market Volatility

​This latest depreciation comes just 24 hours after President Bola Tinubu expressed confidence that the Naira would hit N1,000/$ in the coming weeks. The President attributed the potential recovery to "honesty and discipline" in the government's financial management.

​However, the current market trend shows a "tug-of-war" between government sentiment and market forces. For the Naira to reach the President’s N1,000 target, the following must happen:

1. ​Sustained Forex Inflow: Nigeria needs a massive boost in non-oil exports to bring in organic foreign exchange.
2. ​Increased Crude Production: As the primary source of dollars, meeting and exceeding OPEC quotas is non-negotiable.
3. ​Confidence Restoration: Investors must see consistent policy implementation to stop the "panic buying" of dollars.

​Impact on the Nigerian Economy

​The continued depreciation of the Naira has a direct "ripple effect" on the cost of living. Because Nigeria is an import-dependent nation, a weaker Naira translates to:

• ​Higher Fuel Costs: Since petroleum products are priced in dollars on the international market, a weak Naira puts pressure on domestic pump prices.
• ​Food Inflation: The cost of transporting and importing agricultural inputs rises, leading to higher prices at the local markets.
• ​Business Uncertainty: Small and medium-sized enterprises (SMEs) struggle to plan their budgets when the exchange rate fluctuates daily.

​Economic Insight: "Currency stability is not just about numbers on a screen; it's about the purchasing power of the average citizen. Without a stable Naira, inflation remains an unbeatable foe." — Financial Analyst




​Looking Ahead: Can the Naira Recover?

​While the current news is discouraging, some analysts believe the market is going through a "price discovery" phase. If the CBN continues its aggressive intervention and the government follows through on its promise of attracting foreign investment, we may see a correction in the second quarter of 2026.

​For now, the focus remains on whether the CBN can bridge the liquidity gap fast enough to keep the Naira from crossing the dreaded N1,600/$ mark again.

​Conclusion

​The depreciation of the Naira despite CBN intervention highlights the deep structural challenges facing Nigeria's economy. While the government remains hopeful for a N1,000/$ future, the immediate reality for traders and consumers is one of rising costs and currency instability. All eyes are now on the next move from the Central Bank to see if they will increase the frequency of forex sales or introduce stricter capital controls.