Naira firms slightly as FX liquidity improves

By Philippine Duru

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The naira closed April 2026 on a marginally stronger note across both official and parallel markets, supported by improved liquidity in Nigeria’s foreign exchange (FX) market, according to data released by the Central Bank of Nigeria (CBN).

Total FX turnover rose to approximately $10 billion in April, representing a modest 0.8 percent increase from the $9.92 billion recorded in March. Trading activity also strengthened significantly during the period, with the number of deals rising by 28.61 percent to 7,889, up from 6,134 transactions in the previous month.

A breakdown of market activity showed that the Nigerian Foreign Exchange Market (NFEM) accounted for the bulk of transactions, recording 5,795 deals valued at $8.14 billion. While this reflected a 28.18 percent increase in deal volume compared to March, turnover in the segment dipped slightly by 0.6 percent from $8.19 billion.

Similarly, the interbank segment posted notable growth, with the number of trades rising by 29.82 percent to 2,094 in April from 1,613 in March. Turnover in the segment increased by 7.5 percent to $1.86 billion, up from $1.73 billion in the preceding month.
At the official market, the naira appreciated by ₦3.76 against the dollar at the close of trading on April 30, ending the month at ₦1,374.94 compared to ₦1,378.70 at the start of April, representing a gain of 0.27 percent.

The local currency also strengthened in the parallel market, appreciating by ₦10 to close at ₦1,400 per dollar, a 0.7 percent increase from its opening level of ₦1,410. The convergence between the official and parallel market rates narrowed to about 2.5 percent, indicating improved alignment and reduced arbitrage opportunities.

Despite the improved liquidity conditions, Nigeria’s external reserves declined during the period, falling by $810 million, or 1.65 percent, to $48.37 billion as of April 29, down from $49.18 billion at the beginning of the month.
Market observers attribute the relative stability of the naira to increased participation and improved access to foreign exchange, driven in part by policy measures introduced by the apex bank. These include efforts to enhance formal remittance inflows by enabling easier access for diaspora Nigerians through the Bank Verification Number (BVN) framework and stronger collaboration with international money transfer operators.

The CBN has also encouraged commercial banks to develop products aimed at attracting diaspora funds into the formal FX market, as part of broader efforts to boost dollar inflows and deepen market liquidity.
Analysts say the April performance reflects a gradually improving FX market, supported by rising transaction volumes and increased confidence among participants. However, they caution that sustaining liquidity growth while managing declining external reserves will be critical to maintaining exchange rate stability in the months ahead.