The Nigerian naira extended its downward trend on Tuesday, closing at N1,383 to the US dollar amid renewed pressure in the foreign exchange (FX) market and a continued decline in the country’s external reserves.
Data obtained from the Central Bank of Nigeria (CBN) showed the local currency weakened from N1,369/$ recorded on Monday, underscoring sustained depreciation in recent trading sessions.
Intraday trading saw the naira fluctuate between N1,367.5/$ and N1,385/$, with a simple average rate of N1,380.19/$. Tuesday’s closing rate marks the weakest level since April 7, 2026, when the currency traded at N1,389/$.
On a week-on-week basis, the naira has depreciated significantly compared to last Tuesday’s closing rate of N1,350.99/$.
The pressure on the FX market coincides with a decline in Nigeria’s external reserves. CBN figures indicate that reserves dropped to $48.38 billion as of April 27, 2026, down from $48.51 billion recorded on April 21 — a decrease of approximately $124 million within one week. Analysts attribute this to ongoing FX interventions and external debt obligations.
Globally, the US dollar remained firm ahead of a closely watched policy decision by the Federal Reserve, with investors expecting interest rates to be held steady. The dollar index hovered around 98.57, supported by safe-haven demand amid geopolitical tensions, particularly in the Middle East.
Other major currencies traded within narrow bands, while the Japanese yen lingered near the psychologically significant 160 level against the dollar.
Nigeria’s FX market has faced persistent pressure in recent weeks despite intermittent stabilisation efforts by monetary authorities. Market watchers cite sustained import demand, limited FX inflows, and continued reserve drawdowns as key factors weighing on the naira.
Traders also noted that the CBN has maintained restrictions on Bureau De Change (BDC) operators’ access to the official FX market, citing regulatory concerns and past abuses.
While the decline in reserves has raised concerns about the sustainability of FX support measures, CBN Governor Olayemi Cardoso has downplayed fears, insisting the trend should not trigger alarm.
The apex bank remains optimistic, projecting that external reserves could rise to $51 billion by the end of 2026 as part of broader efforts to stabilise the economy and restore investor confidence.
The simultaneous weakening of the naira and shrinking reserves underscores ongoing fragility in Nigeria’s FX fundamentals, even as global dollar strength continues to exert additional pressure.
