The naira extended its year-to-date gains across foreign exchange market segments as improved liquidity and reassurances from the Central Bank of Nigeria (CBN) bolstered confidence. According to CBN data, the currency appreciated by N80.11 at the Nigerian Foreign Exchange Market (NFEM), with the dollar quoted at N1,350.74 on Tuesday, up from N1,430.85 at the start of the year—a 5.9 percent gain. On a day-to-day basis, the naira weakened slightly by N1.07 from Monday's N1,349.67. At the parallel market, the naira gained N105 since January, closing at N1,395 on Tuesday compared to N1,500, and improved by N5 from Monday's N1,400.
Nigeria's external reserves declined to $48.54 billion as of April 20, 2026, down 2.96 percent from $50.02 billion on March 11, 2026. CBN Governor Olayemi Cardoso, speaking in Washington D.C., dismissed concerns over the drop, stating the decline was normal and that reserves remained well above the International Monetary Fund's minimum threshold. He emphasized that Nigeria's reserves support about 13 months of import coverage, describing the current position as comfortable. Cardoso attributed the naira's resilience to a more market-driven foreign exchange system and reduced reliance on direct CBN intervention.
FMDA reported the naira appreciated 1.66 percent to an average of N1,345.93 last week, with interbank turnover rising 9.5 percent. FMDQ data showed foreign exchange inflows reached $4.4 billion in February 2026, a 45 percent month-on-month increase. Analysts at Quest Merchant Bank credited the rise to stronger offshore investor participation, driven by Nigeria's attractive carry trade opportunities.
Olayemi Cardoso claims Nigeria's declining foreign reserves are nothing to worry about, even as they dropped by nearly $1.5 billion in under six weeks. He insists the naira's strength now depends on market forces, not Central Bank intervention, yet the currency's gains coincide with the very reserves he downplays. If investor confidence is truly independent of reserve levels, then the CBN should have no reason to highlight those same reserves as proof of stability. This contradiction leaves Nigerians questioning what would happen if both reserves and investor sentiment fall at once.
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