By Annette Ikponmwonba | August 20, 2026
KEYPOINTS
- Nigeria’s end user foreign exchange demand fell 35.23% to $3.42bn in April 2026 from the previous month.
- The naira’s monthly average exchange rate strengthened 1.38% to N1,361.22/$.
- FX turnover declined 26.97% to $442.54m, reflecting weaker activity in the official market.
- Net FX inflows rose sharply to $5.85bn, from $4.16bn in March, as outflows fell more significantly than inflows.
- External reserves remained broadly stable at $48.32bn, providing about 10 months of import cover.
MAIN STORY
Demand for foreign exchange by end-users in Nigeria fell by 35.23 per cent to $3.42bn in April 2026, easing pressure on the dollar market and supporting modest gains in the naira, Data from the Central Bank of Nigeria (CBN) showed that foreign exchange utilisation across economic sectors declined during the month, while the naira strengthened at the official market.
The monthly average exchange rate improved by 1.38 per cent to N1,361.22 per dollar in April from N1,379.98 in March. At the end of April, the naira closed at N1,374.94/$ at the Nigerian Foreign Exchange Market, compared with N1,386.72/$ at the end of March, The decline in FX demand was reflected across both visible and invisible imports. Visible imports accounted for 41.92 per cent of total FX utilisation, while invisible imports accounted for the remaining 58.08 per cent.
Industrial activities were the largest users of FX among visible imports, accounting for 37.44 per cent of total utilisation. Manufactured products followed with 21.85 per cent, oil imports with 20.11 per cent and food products with 14.47 per cent, Transport-related imports accounted for 3.54 per cent, while minerals and agriculture represented 1.47 per cent and 1.12 per cent respectively.
Within invisible imports, financial services dominated, accounting for 91.51 per cent of total utilisation. Business services represented 4.37 per cent, transport services 2.58 per cent and communication services 0.84 per cent, The decline in demand was accompanied by weaker activity in the official FX market, with average turnover falling 26.97 per cent to $442.54m in April from $605.93m in March.
Despite lower demand and turnover, Nigeria’s net foreign exchange position improved during the month, largely because the decline in FX outflows was substantially greater than the decline in inflows, Net FX inflows increased to $5.85bn in April from $4.16bn in March. Aggregate FX inflows, however, fell to $8.71bn from $9.70bn, while total outflows dropped sharply to $2.86bn from $5.54bn.
The banking system recorded a net outflow of $180m, significantly lower than the $1.66bn recorded in March. Autonomous sources, meanwhile, generated a net inflow of $6.02bn, The CBN also reported that Nigeria’s external reserves remained broadly stable at $48.32bn at the end of April, compared with $48.35bn in March, At that level, the reserves provided approximately 10 months of import cover, well above the international benchmark of three months.
THE ISSUES
The April data point to a reduction in immediate pressure on Nigeria’s foreign exchange market, The sharp fall in end-user demand means fewer dollars were required to meet import and service-related obligations during the month. At the same time, the steep reduction in FX outflows improved the country’s net foreign exchange position despite lower aggregate inflows.
However, weaker FX utilisation and turnover can also indicate softer economic activity or reduced demand for imported goods and services. This makes the composition of the decline important, particularly for businesses dependent on imported raw materials, machinery and finished products, The stability of external reserves also remains critical. While the $48.32bn reserve position provides a substantial buffer, sustained currency stability will depend on the durability of FX inflows, market liquidity and the CBN’s ability to maintain confidence in the official market.
WHAT’S BEING SAID
The April figures suggest that pressure on the naira eased during the month as demand for foreign exchange declined and net FX inflows improved, The stronger net position was not driven by a surge in total inflows. Instead, it was largely the result of a much sharper reduction in outflows, which fell from $5.54bn in March to $2.86bn in April, The combination of lower dollar demand, reduced outflows and relatively stable reserves provided a more supportive environment for the naira in April.
WHAT’S NEXT
Market attention will now shift to whether the improvement in Nigeria’s FX position can be sustained in subsequent months, A continued moderation in FX demand, stronger autonomous inflows and disciplined outflows could provide further support for the naira and reduce volatility in the official market.
However, renewed demand from importers, higher external obligations or a deterioration in FX inflows could quickly reverse some of the gains, The direction of external reserves, FX turnover and the naira’s official-market performance will therefore remain key indicators of the strength of the improvement.
BOTTOM LINE
Nigeria entered April with significantly lower pressure on its foreign exchange market. End-user FX demand fell by more than a third, outflows nearly halved, net FX inflows strengthened and the naira gained modestly against the dollar, The figures suggest an improving FX balance, but the key test is whether the trend represents a sustained structural improvement or simply a temporary reduction in demand and outflows.
