Naira Strengthens as Remittance Reforms Boost FX Liquidity Despite Falling Reserves
Nigeria’s currency, the naira, started April 2026 on a positive note, posting gains across key foreign exchange markets as improved liquidity—driven largely by recent remittance reforms—helped support the local unit. The strengthening comes as a welcome shift after weeks of pressure, although concerns remain over declining external reserves.
At the official Nigerian Foreign Exchange Market (NFEM), the naira appreciated by N8.02, or 0.58 percent, to close at N1,378.70 per dollar on Wednesday, compared to N1,386.72 the previous day. The parallel market mirrored this trend, with the currency gaining N5 to settle at N1,410 per dollar. However, the gap between the official and black market rates widened slightly to N32, indicating lingering inefficiencies in the FX system.
Despite the improved performance, Nigeria’s external reserves continue to decline, dropping for the 11th consecutive day by $730 million to $49.29 billion as of March 30, according to Central Bank of Nigeria (CBN) data. This persistent fall highlights the fragile balance between short-term currency gains and underlying macroeconomic pressures.
Market analysts point to recent policy actions by the CBN as a key driver of the naira’s recovery. The apex bank has mandated International Money Transfer Operators (IMTOs) to channel remittance inflows through designated naira settlement accounts within the banking system. This move is expected to improve transparency, increase FX supply in the official market, and reduce reliance on informal channels.
Supporting this outlook, data from the National Bureau of Statistics shows capital inflows into Nigeria rose significantly, climbing 7.1 percent quarter-on-quarter and 26.6 percent year-on-year to $6.4 billion—the highest since early 2019. While remittances are becoming a more important FX source, experts caution that sustained naira stability will depend on reversing the decline in external reserves and maintaining consistent policy direction.
source: Business day