Low dollar demand lifts naira across FX markets in April

Nigeria's foreign exchange demand dropped 35.23 per cent in April to $3.42 billion, helping the naira strengthen by 1.38 per cent to N1,361.22 per dollar, according to the Central Bank of Nigeria's monthly economic report. The latest CBN data shows total sectoral FX utilisation fell sharply while stronger net inflows eased pressure on the local currency.

FX utilisation falls sharply

Visible imports accounted for 41.92 per cent of total FX utilisation in April, while invisible imports made up the larger 58.08 per cent share. Industrial activities recorded the largest share of FX used for visible imports at 37.44 per cent, followed by manufactured products at 21.85 per cent and oil imports at 20.11 per cent.

Food products represented 14.47 per cent of visible import-related FX demand. Transport accounted for 3.54 per cent, while minerals and agriculture represented 1.47 per cent and 1.12 per cent, respectively.

For invisible imports, financial services dominated with 91.51 per cent of utilisation. Business services followed at 4.37 per cent, transport services at 2.58 per cent, and communication services at 0.84 per cent.

Naira gains despite lower turnover

The naira appreciated at the Nigerian Foreign Exchange Market (NFEM), with the average exchange rate rising to N1,361.22 per dollar in April from N1,379.98 in March. At the end of April, the NFEM rate stood at N1,374.94 per dollar, improving from N1,386.72 at the end of March.

Average daily FX turnover declined by 26.97 per cent to $442.54 million from $605.93 million, pointing to reduced trading activity during the month.

Nigeria still recorded a stronger net FX inflow of $5.85 billion in April, compared with $4.16 billion in March. Aggregate FX inflows fell to $8.71 billion from $9.70 billion, but total outflows dropped more sharply to $2.86 billion from $5.54 billion.

Banking-system inflows fell to $1.83 billion, while autonomous inflows stood at $6.88 billion. On the outflow side, banking-system payments dropped to $2 billion from $4.12 billion, according to a BusinessDay report.

Reserves stay stable

External reserves remained broadly stable at $48.32 billion at the end of April, compared with $48.35 billion in March. The reserves covered about 10.01 months of imports of goods and services, well above the international benchmark of three months.

Meanwhile, the naira extended its recovery on Thursday, August 20, 2026, gaining N3 against the dollar at the NFEM to close at N1,347 per dollar, from N1,351 the previous day. NFEM turnover also rose slightly to $371.79 million from $370.98 million, signalling increased activity.

In March 2026, the CBN had sharply ramped up FX interventions, selling $953.41 million to the market, the strongest central bank FX activity since April 2025. Spot market transactions made up $950.10 million of the March sales, with $3.31 million directed to Ministries, Departments and Agencies.

What it means for the naira

Lower end-user demand and stronger net inflows helped stabilise the naira in April even as trading activity thinned out. If the trend holds, it could keep the official market supported and reduce pressure on external reserves.