The Naira recorded a marginal decline against the US dollar during the week, closing at N1,374/$ on Thursday, highlighting persistent pressure in the foreign exchange market.
Data from the Central Bank of Nigeria (CBN) shows that the currency fluctuated across sessions, settling at N1,370.5/$ on Wednesday, N1,383/$ on Tuesday, and N1,369/$ on Monday, while markets remained closed on Friday in observance of Workers’ Day.
The latest movement reflects continued volatility in the FX market, as both domestic and external factors weigh on the local currency.
What the data is saying
The CBN data shows that the naira weakened on a week-on-week basis, compared to the N1,361.5/$ recorded the previous Friday and N1,355/$ from the preceding Thursday.
- Weekly trading shows a steady pattern of fluctuations between N1,369/$ and N1,383/$.
- The closing rate of N1,374/$ represents a gradual depreciation trend over the period.
- Nigeria’s external reserves declined to $48.36 billion as of April 29, down from $48.51 billion on April 21.
- The reserve drawdown reflects ongoing FX interventions and external obligations.
The data indicates that the naira remains under pressure, with declining reserves reinforcing concerns about liquidity in the FX market.
More Insights
The recent depreciation comes amid a combination of structural and policy-driven factors affecting FX supply and demand.
- External reserves, which serve as a buffer for FX stability, have recorded intermittent declines throughout April.
- Nairametrics reported earlier that traders have said the CBN had maintained restrictions on Bureau De Change (BDC) operators’ access to the official foreign exchange market, citing concerns over control and past abuses.
- This policy has limited supply in the retail FX segment, contributing to sustained demand pressure.
- Global dollar strength has also added external pressure on emerging market currencies, including the naira.
Despite these challenges, CBN Governor Olayemi Cardoso has dismissed concerns over the reserve decline, expressing confidence in the apex bank’s capacity to manage the situation.
What you should know
During the week, the US dollar held firm as investors awaited the Federal Reserve’s policy decision, widely expected to keep interest rates unchanged. The dollar index steadied around 98.57, supported by safe-haven flows linked to geopolitical uncertainty.
The euro and pound traded in relatively tight ranges, while the Japanese yen remained near the psychologically sensitive 160 level.
The simultaneous weakening of the naira and decline in external reserves signal continued fragility in Nigeria’s FX fundamentals, even as global dollar dynamics add external pressure.
Nairametrics reported earlier that Nigeria’s external reserves declined by about $731 million within the first three weeks of April 2026.
Despite the recent dip, the CBN maintains an optimistic outlook for the country’s external reserves.
- The apex bank had previously projected that reserves could reach $51 billion by the end of 2026 as part of its broader macroeconomic stabilization and confidence-restoration agenda.
