The ongoing trade war involving the United States, China, and other major economies has fuelled economic uncertainty, leading to significant foreign exchange (forex) outflows from Nigeria. In response, the Central Bank of Nigeria (CBN) intervened by injecting $500 million into the forex market. However, the naira continued to depreciate, falling to N1,600 per dollar in the parallel market and N1,548 in the official market.

Rising global tariffs, including a 25% duty on metal imports into the U.S., have spurred inflation fears and stock market declines, prompting investors to move assets to safer options. Foreign portfolio investors have also been repatriating funds from Nigeria, intensifying forex demand and weakening the naira. Between February 26 and March 14, the naira lost 7.4% in the parallel market and 3.3% in the official market.

Currency traders attribute the depreciation to weak dollar supply, with banks halting weekly dollar sales to Bureaux De Change (BDCs). Experts, including ABCON President Aminu Gwadabe, urge the CBN to sustain forex interventions and reinforce market stability. Without adequate dollar liquidity, the naira may weaken further, potentially reaching N1,700 per dollar.