Nigeria’s currency came under renewed pressure on Tuesday, weakening to N1,389 per dollar as the country’s external reserves declined by approximately $850 million within three weeks, according to fresh data published by the Central Bank of Nigeria (CBN).
The figures show that external reserves fell to $49.18 billion between March 11 and April 2, 2026, reversing part of the gains recorded earlier in the year.
At the Nigerian Foreign Exchange Market (NFEM), the naira depreciated to N1,389/$ from N1,382.75/$ recorded before the Easter break.
Intraday trading reflected mild volatility, with the currency fluctuating between N1,381/$ and N1,390/$ and settling at an average rate of N1,386.3/$.
NFEM interbank turnover stood at 48,655,051.7800, with 71 deals executed during the session, indicating steady but cautious activity in the market.
The latest performance underscores sustained pressure on the naira and signals a potential shift in Nigeria’s external position after months of relative stability.
The reserve drawdown comes weeks after CBN Governor Olayemi Cardoso announced that Nigeria’s external reserves had climbed to $50.45 billion as of February 16, 2026 — the highest level in 13 years — supported by improved foreign inflows and ongoing policy reforms.
However, the recent $850 million decline has raised concerns among market participants about the durability of that recovery.
The naira’s weakening occurred against a backdrop of heightened global currency volatility triggered by geopolitical tensions, particularly involving the United States and Iran.
READ ALSO: Naira slips to N1,387/$ in March amid persistent FX market turmoil
Following the announcement of a two-week ceasefire by US President Donald Trump, the US dollar weakened broadly, lifting investor confidence and strengthening several major currencies.
The Japanese yen appreciated by 0.7% to 158.50 per dollar, while the euro rose 0.7% to $1.1677. The British pound gained 0.8% to $1.3403. Meanwhile, the Australian dollar climbed 1.2% to $0.7063, and the New Zealand dollar advanced 1.1% to $0.5795.
The US dollar index declined to 98.943 — its lowest level since March 11 — extending a three-day slide.
Analysts note that easing geopolitical tensions reduced fears of supply chain disruptions, particularly in energy markets, contributing to the dollar’s pullback.
Meanwhile, the OPEC+ coalition reportedly raised its oil production quota by 206,000 barrels per day for May 2026.
The group had been gradually unwinding output cuts since 2025 to regain market share, increasing quotas by 2.9 million bpd between April and December 2025 before pausing supply hikes in early 2026.
Energy market developments remain critical for Nigeria, whose external reserves are closely tied to oil export earnings.
Dr. Aisha Bello, a Lagos-based macroeconomic analyst, said the decline in reserves could reflect increased foreign exchange interventions by the CBN to stabilise the naira.
“When reserves fall while the currency weakens, it suggests the central bank may be defending the currency amid reduced inflows or capital outflows. Sustained reserve depletion could limit the CBN’s ability to support the market,” she explained.
Financial economist Tunde Adeyemi added that global currency shifts also influence emerging market currencies like the naira.
“Even though the dollar has weakened globally, Nigeria’s external vulnerabilities — including oil price fluctuations and capital flow uncertainties — continue to weigh on the naira. Reserve adequacy is key to maintaining investor confidence,” he said.
While Nigeria’s reserves remain relatively strong compared to historical levels, the recent drop and renewed exchange rate pressure signal emerging strains on the country’s external buffers.
Market watchers say sustained oil revenues, stable geopolitical conditions, and continued policy credibility will be crucial in determining whether the naira stabilises or faces further depreciation in the weeks ahead.