By Boluwatife Oshadiya
Key Points
- Nigeria’s external reserves declined by approximately $855 million between April 1 and May 7, 2026.
- Data from the Central Bank of Nigeria (CBN) showed reserves fell from $49.18 billion to $48.33 billion within the five-week period.
- Despite the decline, reserve levels remain more than $10 billion higher than the same period in 2025.
- Analysts say the reserves remain critical for naira stability, import financing, debt obligations, and investor confidence.
Main Story
Nigeria’s external reserves recorded a sustained decline over the past five weeks, shedding about $855 million amid renewed pressure in the foreign exchange market.
Latest figures released by the Central Bank of Nigeria showed that gross external reserves fell from $49.18 billion on April 1, 2026, to $48.33 billion as of May 7, 2026.
The decline represents a drop of about 1.74% over a 36-day period and signals mounting demand pressure on Nigeria’s foreign exchange buffers despite ongoing monetary and foreign exchange reforms.
According to the CBN data, reserves fell consistently throughout April. The balance declined from $49.133 billion on April 2 to $48.940 billion on April 7 before dropping further to $48.675 billion by April 15. External reserves later weakened to $48.541 billion on April 20 and closed the month at $48.364 billion before settling at $48.325 billion on May 7.
The latest depletion comes after months of relative improvement in Nigeria’s reserve position, driven largely by reforms introduced under the administration of Bola Ahmed Tinubu, and tighter monetary policy measures implemented by the apex bank.
Foreign portfolio inflows, improved oil export earnings, reduced import demand, and efforts to improve transparency in the foreign exchange market had previously supported reserve accretion. The reserves had earlier climbed above $50 billion in March 2026, marking one of the country’s strongest reserve positions in recent years before the latest reversal.
However, despite the recent decline, Nigeria’s reserve position remains significantly stronger on a year-on-year basis. CBN figures showed reserves stood at $38.17 billion in early April 2025 and declined to $37.93 billion by the end of that month. This means current reserve levels are still more than $10 billion higher compared to the same period last year.
What’s Being Said
Market analysts say the decline in reserves may reflect increased foreign exchange interventions, external debt servicing obligations, and sustained demand for dollars from importers and investors.
Economists also note that reserve movements are closely monitored by investors because they provide a measure of the country’s ability to defend the naira, finance imports, and meet international payment obligations.
“External reserves remain one of the strongest indicators of macroeconomic stability and investor confidence in emerging markets,” analysts at several Lagos-based investment firms have noted in recent market commentaries.
The CBN has not yet issued an official explanation for the latest depletion in reserves.
What’s Next
Attention will now shift to whether Nigeria can sustain foreign exchange inflows through stronger crude oil earnings, increased non-oil exports, diaspora remittances, and renewed foreign investor participation.
The CBN had previously projected that external reserves could rise to $51 billion by the end of 2026 as part of its medium-term macroeconomic stabilisation strategy.
Analysts expect the apex bank to continue balancing exchange-rate stability with liquidity management as authorities attempt to sustain confidence in the foreign exchange market.
Bottom Line
Although Nigeria’s external reserves have declined sharply over the past five weeks, the country’s reserve position remains considerably stronger than last year’s levels. The latest trend, however, highlights the continuing pressure on Nigeria’s foreign exchange market and the importance of sustained inflows to preserve naira stability and broader investor confidence.
