The Nigerian naira posted a slight week-on-week decline, closing at N1,374 per dollar on Thursday, as persistent volatility continues to shape the foreign exchange market.
Data from the Central Bank of Nigeria shows the currency fluctuated throughout the week, trading at N1,369/$ on Monday, N1,383/$ on Tuesday, and N1,370.5/$ on Wednesday, before markets closed on Friday in observance of International Workers’ Day. The latest figures mark a gradual depreciation from the previous week’s closing rates of N1,361.5/$ and N1,355/$.
The trading pattern highlights continued pressure on the naira, with rates oscillating between N1,369/$ and N1,383/$ over the period. This instability reflects both domestic constraints and external influences weighing on Nigeria’s currency.
A key concern is the country’s external reserves, which declined to $48.36 billion as of April 29, down from $48.51 billion recorded on April 21. The drop signals ongoing foreign exchange interventions by the central bank, alongside external obligations that continue to draw on reserves. Analysts see this trend as a sign of tightening FX liquidity.
Several structural and policy-related factors are contributing to the pressure. Restrictions maintained by the CBN on Bureau De Change operators’ access to the official FX market have limited supply in the retail segment, sustaining demand pressures. At the same time, global dollar strength has added another layer of strain on emerging market currencies, including the naira.
Despite these challenges, CBN Governor Olayemi Cardoso has downplayed concerns about the reserve decline, expressing confidence in the bank’s ability to manage market conditions and maintain stability.
Globally, the U.S. dollar remained firm during the week as investors anticipated a policy decision from the Federal Reserve, with expectations that interest rates would remain unchanged. The dollar index hovered around 98.57, supported by safe-haven demand amid geopolitical uncertainty. Meanwhile, other major currencies such as the euro and British pound traded within narrow ranges, while the Japanese yen stayed close to the key 160 level.
The combination of a weakening naira and declining reserves underscores ongoing fragility in Nigeria’s FX fundamentals. Still, the CBN maintains an optimistic outlook, projecting that external reserves could rise to about $51 billion by the end of 2026 as part of broader efforts to stabilize the economy and restore investor confidence.
