Mixed Signals: Naira rises while Nigeria’s FX reserves decline

The Nigerian naira gained value on Friday, closing at N1,342.5 per dollar, stronger than the N1,355.25/$ recorded the previous week.

The improvement was supported by better global market sentiment and a weaker U.S. dollar, according to data from the Central Bank of Nigeria (CBN).

This shows a gradual recovery in the foreign exchange market, helped by both international factors and local policy actions.

How the naira performed during the week

The naira strengthened steadily throughout the week:

Monday: N1,358/$

Tuesday: N1,348/$

Wednesday: N1,341.99/$

Thursday: N1,341.01/$

Friday: N1,342.5/$

This marks a clear improvement compared to the previous week, when the currency weakened to as low as N1,389/$ before recovering.

External reserves continue to fall

Despite the naira’s gains, Nigeria’s external reserves continued to decline.

Reserves fell to $48.65 billion as of April 16, 2026

This is lower than $48.72 billion at the start of the week

It is also below $48.81 billion at the end of the previous week

The drop suggests that the Central Bank may still be using reserves to support the naira and meet demand for foreign exchange. However, analysts warn that continued decline could create long-term risks unless stronger foreign inflows come from oil exports and investment.

Global factors support the naira

The naira’s recent gains were also helped by global developments, especially the weakening of the U.S. dollar.

The U.S. dollar index fell by 0.49% to 97.73, its lowest level since February

The euro rose by 2.7% during the week

The Japanese yen also strengthened against the dollar

The dollar weakened due to reduced global tensions in the Middle East, which lowered demand for safe-haven currencies and supported emerging market currencies like the naira.

What this means

Although the naira is recovering in the short term, pressure remains due to falling reserves.

Experts say sustained stability will depend on stronger foreign earnings, especially from oil exports and foreign investment inflows.