The Nigerian Naira exhibited relative stability against the US Dollar as the first full trading week of March 2026 concluded, even as it softened slightly compared to late February levels. Market data from the Nigerian Foreign Exchange Market (NFEM) and parallel market channels indicate that the local currency remained largely within a predictable trading range, supported by robust foreign reserves and a continued decline in inflationary pressures.
Official Market Movements
In the official NFEM window, the Naira opened Friday morning at 1,385.42 per dollar. By 3:00 AM WAT, it showed marginal appreciation, settling at 1,385.20, slightly lower than the previous day’s close of 1,385.30. The movement reflects a consolidation phase in the market, following a subtle week-on-week depreciation from late February, when the Naira traded closer to the 1,360 per dollar level.
Authorized dealers report that the Central Bank of Nigeria (CBN) continues to operate under a “willing-buyer-willing-seller” model, which has helped reduce extreme intraday volatility observed in past years and kept liquidity levels steady.
Parallel Market Trends
In the parallel or informal market, the Naira traded between 1,395 and 1,405 per dollar. The spread between the official and parallel windows has remained narrow, estimated at roughly 1.5%. Traders in Lagos and Abuja noted typical end-of-week demand for personal travel and small-scale business needs, but no signs of speculative hoarding. Analysts say the narrowing gap between the two markets indicates that CBN’s foreign exchange supply to Bureau De Change (BDC) operators is effectively meeting retail demand.
Macro Drivers Supporting the Naira
Several key economic factors are providing a floor for the Naira this March:
- Record-High Reserves: Nigeria’s gross external reserves recently reached $50.45 billion, covering roughly 9.68 months of imports, giving the CBN significant capacity to manage currency stability.
- Cooling Inflation: Headline inflation fell to 15.10% from a 2024 peak of 34.19%, bolstering the real value of the Naira.
- Domestic Refining Gains: The Dangote Petroleum Refinery is absorbing a portion of global crude price increases, reducing the need for foreign exchange in refined product imports and limiting energy-driven inflation pressures.
- Stable Oil Production: Nigeria’s crude output has remained steady near 1.46 million barrels per day, ensuring reliable foreign exchange inflows.
Outlook
Analysts project that the Naira is likely to close the week in the 1,380–1,390 range, with market attention shifting toward mid-month trade data that will offer a clearer view of the long-term effects of recent interest rate adjustments.
The current stability, underpinned by strong reserves and declining inflation, suggests that the Naira may continue to trade within a narrow band, providing some relief to importers, businesses, and consumers navigating the early months of 2026.