Nigeria’s foreign exchange (FX) reserves have experienced a notable contraction, falling by approximately $1.38 billion over five weeks to settle at $48.6 billion.
This development comes amid ongoing efforts by the Central Bank of Nigeria (CBN) to transition toward a more market-driven foreign exchange (FX) system, moving away from previous models that relied heavily on direct central bank intervention.
Data obtained from the CBN revealed that Nigeria’s FX reserves dropped between March 11, 2026, and April 16, 2026.
Further breakdown of the data revealed that Nigeria’s FX reserves stood at $50.03 billion as of March 11, 2026, before declining to $48.65 billion by April 16.
While the CBN is yet to explain the reason for the drop, historical trends indicate a steady drawdown rather than a sharp drop.
The latest figures indicate a gradual but consistent decline in reserves over several weeks, pointing to persistent outflows or interventions in the FX market.
Daily data shows a steady reduction, with reserves dropping from $49.18 billion on April 1 to $48.72 billion by April 13, and further to $48.65 billion by April 16.
The pattern reflects a controlled drawdown rather than abrupt depletion, suggesting measured interventions or external obligations.
The data highlights ongoing pressures on Nigeria’s foreign exchange reserves despite earlier gains recorded at the start of the year.
Nigeria’s external reserves have historically exhibited volatility, largely influenced by global oil prices, capital flows, and domestic monetary policy actions.
In January 2026, reserves rose by about $509 million within the first 22 days, signalling improved inflows and stronger FX conditions at the time.
The current decline represents a reversal of that earlier upward trend, underscoring the cyclical nature of reserve movements.
A similar pattern was observed in October 2018, when reserves dropped by $1.1 billion within two weeks, highlighting how quickly external buffers can fluctuate.
Fitch Ratings recently projected that Nigeria’s foreign exchange reserves will decline to $47 billion by the end of 2026, despite ongoing reforms aimed at stabilising the economy.
These historical movements reinforce the sensitivity of Nigeria’s reserves to both global market dynamics and domestic economic conditions.
Officials and analysts have maintained that the recent decline does not necessarily signal a crisis but reflects normal market adjustments and evolving FX dynamics.
This comes after the CBN Governor Olayemi Cardoso stated that the FX market has become more market-driven, with increased liquidity and reduced reliance on central bank interventions.
He noted that the market now records an average daily turnover of about $500 million, often without direct intervention from the CBN.
Cardoso also emphasised that reserve fluctuations are normal and that Nigeria’s reserves remain above the minimum threshold recommended by the International Monetary Fund.
