Nigeria’s Naira weakened to N1,389 per dollar, reflecting growing pressure on the local currency as the country’s external reserves fell by approximately $850 million within three weeks, according to data from the Central Bank of Nigeria (CBN) released Tuesday. This comes after the Naira traded at N1,382.75/$ prior to the Easter break, signaling a reversal of earlier gains in the currency market.
Intraday trading showed fluctuations between N1,381/$ and N1,390/$, with an average rate of N1,386.3/$, highlighting mild but persistent stress in Nigeria’s foreign exchange market. The NFEM interbank turnover stood at over 48.6 million, with 71 deals recorded, underscoring continued activity despite external pressures. Analysts attribute the volatility to both domestic and global factors, including shifts in investor sentiment and Nigeria’s external reserves trajectory.
The decline in Nigeria’s reserves—from $50.45 billion in mid-February to $49.18 billion in early April—follows earlier record highs that marked the highest levels in 13 years. CBN Governor Olayemi Cardoso had attributed the earlier gains to improved inflows and policy reforms, but the recent drop has raised concerns about the sustainability of reserve growth amid emerging economic pressures.
Global currency movements also influenced local market dynamics. The easing of U.S.-Iran tensions boosted investor confidence, while the U.S. dollar index fell to its lowest since March 11, benefiting the euro, yen, pound, and other major currencies. Meanwhile, OPEC+’s recent decision to raise its oil production quota for May 2026 adds another variable impacting Nigeria’s foreign earnings and currency stability.
Market watchers note that the weakening Naira and declining reserves highlight vulnerabilities in Nigeria’s external position despite previous positive momentum. With geopolitical developments and fluctuating global oil markets continuing to shape investor sentiment, analysts expect sustained pressure on the Naira in the near term, signaling a need for careful monitoring of policy interventions by the CBN.
source: nairametrics