The Nigerian naira strengthened further on Friday, closing at N1,342.5 per dollar, an improvement from N1,355.25/$ recorded the previous week, as improved global sentiment and a weaker U.S. dollar boosted demand for emerging market currencies.
Data from the Central Bank of Nigeria (CBN) showed the local currency recorded steady gains throughout the week, signalling a gradual recovery in the foreign exchange market driven by a mix of global developments and local policy interventions.
Week-Long Naira Performance
The naira posted consistent improvements during the trading week:
- Monday: N1,358/$
- Tuesday: N1,348/$
- Wednesday: N1,341.99/$
- Thursday: N1,341.01/$
- Friday: N1,342.5/$
The performance marked a notable recovery from the previous week when the currency weakened sharply to as low as N1,389/$ before staging a rebound.
Analysts say the steady appreciation reflects improved liquidity and cautious optimism in the foreign exchange market.
External Reserves Decline Raises Concern
Despite the naira’s gains, Nigeria’s external reserves continued to decline, raising concerns about the sustainability of the currency’s recovery.
Figures showed that reserves dropped to $48.65 billion as of April 16, 2026, down from $48.72 billion at the start of the week and below the $48.81 billion recorded at the end of the previous week.
The decline suggests that the Central Bank may still be intervening in the foreign exchange market to support the naira and meet demand for dollars.
Market analysts warn that continued depletion of reserves could pose long-term risks if not supported by stronger foreign inflows, particularly from oil exports and foreign direct investment.
Global Factors Support Naira
The naira’s recent gains were also influenced by global market developments, particularly the weakening of the U.S. dollar.
During the week:
- The U.S. Dollar Index fell by 0.49% to 97.73, its lowest level since February
- The euro strengthened by 2.7%
- The Japanese yen also gained against the dollar
The dollar weakened following reduced geopolitical tensions in the Middle East, which lowered demand for safe-haven assets and boosted emerging market currencies, including the naira.
Outlook Remains Cautiously Positive
While the naira’s short-term recovery offers some relief, experts caution that underlying pressures remain, especially with declining external reserves.
Analysts say sustained currency stability will depend largely on:
- Increased oil export earnings
- Stronger foreign investment inflows
- Improved dollar liquidity in the domestic market
For now, the naira’s steady appreciation signals improving market sentiment, but long-term stability will depend on stronger fundamentals and sustained foreign exchange inflows.
