The naira posted a modest week-on-week decline against the US dollar, closing at N1,374/$ on Thursday, underscoring sustained volatility in Nigeria’s foreign exchange market.
Data from the Central Bank of Nigeria (CBN) showed the currency moved unevenly خلال the week, settling at N1,370.5/$ on Wednesday, N1,383/$ on Tuesday, and N1,369/$ on Monday. Markets were closed on Friday in observance of Workers’ Day.
The latest performance marks a slight depreciation compared to N1,361.5/$ recorded the previous Friday and N1,355/$ the preceding Thursday, with trading largely confined within a band of N1,369/$ to N1,383/$.
External reserves also trended downward, falling to $48.36 billion as of April 29 from $48.51 billion on April 21, reflecting ongoing FX interventions and external obligations. The decline adds to concerns over liquidity pressures in the FX market.
Market dynamics indicate that the naira remains under strain from a mix of structural challenges and policy constraints affecting FX supply. Analysts point to continued restrictions on Bureau De Change (BDC) operators’ access to the official FX window, a move by the CBN aimed at tightening market oversight but which has also constrained retail dollar supply and sustained demand pressure.
Externally, a stronger US dollar has compounded the situation for emerging market currencies, including the naira. Investors maintained a cautious stance during the week ahead of the Federal Reserve policy decision, with expectations of a rate hold. The dollar index hovered around 98.57, supported by safe-haven demand amid geopolitical uncertainty.
Other major currencies traded within narrow ranges, while the Japanese yen remained near the psychologically significant 160 level against the dollar.
Despite the downward trend in reserves—estimated to have declined by about $731 million in the first three weeks of April—CBN Governor Olayemi Cardoso has downplayed concerns, expressing confidence in the bank’s capacity to manage external buffers.
The apex bank maintains that reserves could rise to $51 billion by year-end, anchored on its broader macroeconomic stabilization and investor confidence agenda.
Overall, the combined impact of a weakening naira and declining reserves points to ongoing fragility in Nigeria’s FX fundamentals, even as global dollar strength continues to exert additional pressure.
