Nigeria’s currency recorded a broad-based appreciation during the shortened trading week, supported by aggressive liquidity mop-up by the Central Bank of Nigeria through Open Market Operations (OMO), a move that boosted investor confidence and increased dollar inflows.
Data from the apex bank showed that the naira strengthened by N23.90 week-on-week to close at N1,356.89 per dollar at the Nigerian Foreign Exchange Market (NFEM) window, compared with N1,380.79 recorded before the Easter holiday. This reflects a gain of 1.76 percent over the period.
On a daily basis, the currency also appreciated, rising by N12.43 or 0.92 percent from N1,359.32 on Thursday. Over the four trading sessions, the naira advanced from N1,386.66 on Tuesday to N1,356.89 on Friday, marking a total gain of N29.77 or 2.19 percent.
A similar trend was observed in the parallel market, where the naira appreciated by N10 week-on-week to close at N1,400 per dollar, improving from N1,410 previously recorded. Day-on-day, it gained N5 from N1,405 on Thursday.
Despite the overall gains, the gap between the official and parallel market rates widened to N44 per dollar, up from N30 the previous week, highlighting persistent structural pressures in the foreign exchange market.
Market analysts attributed the naira’s performance largely to the Central Bank’s OMO auctions, which saw a total of N2.31 trillion mopped up during the week. The tightening of liquidity typically attracts foreign portfolio investors, who inject dollars into the system to participate in high-yield instruments, thereby strengthening the local currency.
However, the positive currency movement occurred alongside a decline in Nigeria’s external reserves, which dropped by $1.14 billion to $48.88 billion as of April 8, 2026, from $50.02 billion recorded on March 11—representing a 2.28 percent decrease.
A report by Comercio Partners noted that while the foreign exchange market remained relatively stable in March, the naira still faced mild depreciation pressures. The currency traded within a narrow band, opening at N1,376 per dollar and closing at N1,387, reflecting a modest depreciation of 0.79 percent.
According to the firm, the slight weakening was driven by external debt servicing obligations and continued interventions by the Central Bank to manage liquidity. Demand for foreign exchange for imports and other invisible transactions also contributed to pressure on the currency, although this was partly offset by official dollar sales.
The report further highlighted the role of global factors, including oil price fluctuations and foreign exchange demand, in shaping market dynamics. Nevertheless, active participation by the Central Bank helped prevent sharp volatility during the period.
Looking ahead, analysts at Comercio Partners expect the naira to experience mild to moderate depreciation pressures in April, with the market likely to remain in a consolidation phase under the current willing-buyer, willing-seller framework.
They also pointed to recent policy changes allowing international oil companies to fully repatriate export proceeds, noting that while the move may enhance transparency and attract investment, it has contributed to short-term foreign exchange outflows and added pressure on reserves.
Despite these risks, the firm projected that Nigeria’s external reserves could stabilise or recover slightly in the near term, supported by relatively strong crude oil prices, although production challenges remain a key constraint to sustained foreign exchange inflows.