The naira's value dropped slightly against the dollar in the official foreign exchange market on Monday, with the currency depreciating by N3 to N1,383.58 per dollar. This represents a 0.22 percent loss at the Nigerian Foreign Exchange Market. In contrast, the naira remained unchanged at N1,415 per dollar in the parallel market, where it has held steady since last week. The gap between the official and parallel markets narrowed marginally to N32 on Monday from N35 on Friday.
Nigeria's external reserves have been on a downward trend, falling by $580 million or 1.16 percent to $49.44 billion as of March 27, 2026. This decline has been consistent over the past 10 days. Total international payments also decreased, with a 16 percent month-on-month and 39 percent year-on-year decline to $405.3 million in January 2026. Analysts at Quest Merchant Bank noted that the decline in foreign exchange payments could help reduce pressure on the naira.
The Central Bank of Nigeria has introduced measures to improve transparency and liquidity in the FX market, including directing International Money Transfer Operators to open naira settlement accounts effective May 1, 2026. The CBN has also lifted foreign exchange restrictions on International Oil Companies, allowing full repatriation of export proceeds and access to 100 percent of their FX earnings through authorised dealer banks.
The decline in Nigeria's external reserves to $49.44 billion as of March 27, 2026, is a concerning trend that warrants attention from policymakers. The Central Bank of Nigeria's decision to lift foreign exchange restrictions on International Oil Companies may increase pressure on FX liquidity in the short term, but it is expected to improve investor confidence and attract fresh capital into the oil and gas sector over time. Analysts at Quest Merchant Bank believe that the decline in foreign exchange payments could help ease pressure on the naira, and the CBN's measures to improve transparency and liquidity in the FX market are steps in the right direction. However, the consistent decline in external reserves over the past 10 days is a trend that needs to be closely monitored. The CBN's efforts to strengthen formal inflows and enhance oversight are crucial in addressing the current challenges facing the naira.
