The naira appreciated to N1,341.99 per dollar at the official foreign exchange market on Wednesday, marking its strongest performance since February 18, 2026.
The currency’s appreciation reflects a consistent upward trajectory during the week—from N1,358/$ on Monday to N1,348/$ on Tuesday—while also improving from N1,369/$ recorded on April 8. The trend suggests a modest restoration of short-term confidence and relative stability at the official FX window.
Nonetheless, underlying vulnerabilities remain evident. Nigeria’s external reserves declined to $48.72 billion as of April 13, compared to $49.18 billion at the beginning of the month, indicating continued pressure on external buffers.
Structural inefficiencies in the FX market persist, particularly the divergence between official and parallel market rates. Market operators attribute this to speculative activity, constrained FX supply, and limited access in the retail segment. Analysts emphasize that narrowing this gap will depend on stronger FX inflows, enhanced liquidity, and greater policy clarity.
External factors have also contributed to the naira’s recent gains. The U.S. dollar weakened amid improved global risk sentiment, partly driven by expectations of renewed diplomatic engagement between the United States and Iran. This has provided temporary support for emerging market currencies.
In the commodities market, oil prices remain elevated due to geopolitical tensions around the Strait of Hormuz, with Brent crude trading near $94.87 per barrel. While higher oil prices could strengthen Nigeria’s external position, they pose upside risks to inflation.
Recent macroeconomic indicators further underscore the mixed outlook. The IMF revised Nigeria’s 2026 growth forecast downward to 4.1% from 4.4%, while inflation rose to 15.38% in March from 15.06% in February.
Despite these pressures, the Central Bank of Nigeria maintains a cautiously optimistic outlook, projecting external reserves to increase to $51.04 billion in 2026.
