Naira slips as reserves decline 10 days straight

The naira weakened slightly against the dollar in the official foreign exchange (FX) market on Monday, even as Nigeria’s external reserves extended their recent decline to 10 consecutive days.

Data from the Central Bank of Nigeria (CBN) showed the currency depreciated by N3 to N1,383.58 per dollar, compared with N1,380.58 recorded on Friday, representing a 0.22 percent loss at the Nigerian Foreign Exchange Market (NFEM).

In the parallel market, the naira remained unchanged at N1,415 per dollar, holding steady since last week. The spread between the official and parallel markets narrowed marginally to N32 on Monday from N35 on Friday.

External reserves have continued on a downward trend, falling by $580 million or 1.16 percent to $49.44 billion as of March 27, 2026, from $50.02 billion recorded on March 11, according to CBN data.

Recent data also showed a moderation in Nigeria’s external payments. Total international payments declined by 16 percent month-on-month and 39 percent year-on-year to $405.3 million in January 2026. The drop was largely driven by a sharp fall in remittance outflows to $107.5 million from $200.3 million in the previous month. Letters of credit obligations also declined to $41.5 million from $75.5 million in December.

However, external debt service payments rose by 25 percent month-on-month to $256.8 million, reflecting the typical front-loading of sovereign obligations at the start of the year.

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Analysts at Quest Merchant Bank said the decline in foreign exchange payments could help ease pressure on the naira by reducing demand for dollars, even as it slows the pace of reserve drawdowns.

They noted that reserve accretion in recent months has been supported by foreign portfolio inflows, improved export earnings, and resilient diaspora remittances, while subdued import activity at the start of the year has also contributed to lower demand for foreign exchange.

On the policy front, the CBN has introduced measures aimed at improving transparency and liquidity in the FX market. The apex bank recently directed all International Money Transfer Operators to open naira settlement accounts effective May 1, 2026, a move expected to strengthen formal inflows and enhance oversight.

In addition, the CBN lifted foreign exchange restrictions on International Oil Companies, allowing full repatriation of export proceeds and access to 100 percent of their FX earnings through authorised dealer banks. This marks a shift from the previous regime, which imposed partial restrictions and delayed access to funds.

While the analysts say the policy could increase pressure on FX liquidity in the short term, particularly amid global risk aversion, they argue it should improve investor confidence and attract fresh capital into the oil and gas sector over time.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.