Nigeria’s naira suffered a sharp blow on April 4, 2025, closing at ₦1,600 per dollar on the official market — its weakest level since December 2024.
This came amidst the global financial markets staggering from the ripple effects of U.S. President Donald Trump’s new wave of tariffs.
Data from the Central Bank of Nigeria (CBN) confirmed the 1.9% depreciation from the previous day’s rate of ₦1,569/$1. The intraday trading window also showed significant volatility, with highs of ₦1,625/$1 and lows of ₦1,519/$1, pointing to a market struggling to find balance amid mounting pressure.
The latest depreciation means the naira has already weakened by 3.9% in just the first four days of April, after closing March at ₦1,537/$1. The NFEM (Nigerian Foreign Exchange Market) average exchange rate closed at ₦1,567/$1, marking the lowest level seen this year and the weakest since December 4, 2024.
CBN reserves rise, but concerns persist
In a contrasting development, the CBN revealed a rise in its Net Foreign External Reserves (NFER), which stood at $23.11 billion as of the end of 2024 — the highest level recorded in over three years. This is a notable improvement from $3.99 billion at the end of 2023.
Analysts have responded with cautious optimism. While the uptick in reserves reflects better reserve management, some financial experts warn that Nigeria’s reliance on short-term portfolio inflows still leaves it vulnerable to external shocks.
Sources close to the central bank say preparations are underway for a new round of foreign currency forwards — contracts that lock in future exchange rates. These may be more favorable to Nigeria compared to those previously used during the Emefiele era, which were often criticized for unfavorable terms.
Trump tariffs trigger global sell-off
The latest downturn in the naira’s value follows heightened volatility in global markets triggered by President Trump’s imposition of sweeping tariffs on all U.S. trading partners, dubbed “Liberation Day.” The move, which includes a 14% tariff on Nigerian imports into the U.S., caused widespread panic in financial markets, prompting a global sell-off.
Though the 14% rate is considered a “concession” from the original 28% tariff Nigeria qualified for under Trump’s criteria, the real impact may be indirect — especially on Nigeria’s vital oil sector.
Crude oil dips below $70 — budget at risk
Crude oil prices plunged below $70 per barrel for the first time this year amid growing fears of a global recession reminiscent of the COVID-19-era downturn. For Nigeria, this spells danger. The country’s 2025 budget is anchored on a benchmark of $75 per barrel and a production target of 1.8 million barrels per day.
Analysts warn that if oil prices remain low, Nigeria could struggle to earn the foreign exchange needed to stabilize the naira, deepening economic woes in the months ahead.
As the global economic outlook darkens and trade tensions rise, all eyes are on the CBN’s next move and whether its reserve buffer and forward strategies will be enough to prevent a deeper currency crisis.
