Lower dollar demand and reduced outflows eased pressure on the foreign exchange market as reserves remained above $48bn in April

Foreign exchange demand by end-users in Nigeria fell by 35.23 per cent to $3.42bn in April 2026, helping to ease pressure on the dollar market as the naira recorded modest gains, according to data from the Central Bank of Nigeria.

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The decline in FX demand falls 35% came alongside a sharp reduction in foreign exchange outflows and stronger net inflows, providing a more supportive environment for the naira during the month.

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 per dollar at the Nigerian Foreign Exchange Market, compared with N1,386.72 at the end of the previous month.

The figures point to a notable shift in the foreign exchange market, with both demand and turnover declining while the country’s overall net FX position strengthened.

Imports remain the biggest demand driver

Visible imports accounted for 41.92 per cent of total foreign exchange utilisation in April, while invisible imports made up the remaining 58.08 per cent.

Industrial activities represented the largest share of visible-import demand, accounting for 37.44 per cent of total FX utilisation.

Manufactured products followed with 21.85 per cent, while oil imports accounted for 20.11 per cent and food products represented 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.

Financial services dominated invisible imports, accounting for 91.51 per cent of utilisation within the category. Business services represented 4.37 per cent, transport services 2.58 per cent and communication services 0.84 per cent.

The composition suggests that financial services continued to account for a particularly significant share of Nigeria’s demand for foreign currency outside physical imports.

FX outflows fall sharply

The decline in demand was accompanied by weaker activity in the official foreign exchange market.

Average FX turnover fell by 26.97 per cent to $442.54m in April, from $605.93m in March.

However, the more significant movement came from the country’s net foreign exchange position.

Net FX inflows increased to $5.85bn in April from $4.16bn in March, despite aggregate inflows declining during the period.

Total inflows fell to $8.71bn from $9.70bn, but outflows dropped much more sharply, declining to $2.86bn from $5.54bn.

The banking system’s net outflow also narrowed substantially, falling to $180m from $1.66bn in March.

Autonomous sources, meanwhile, generated a net inflow of $6.02bn during the month.

The combination of falling demand, lower outflows and stronger net inflows provided a welcome boost to foreign exchange liquidity and helped moderate pressure on the naira.

Reserves remain strong

Nigeria’s external reserves remained broadly stable at $48.32bn at the end of April, compared with $48.35bn at the end of March.

The reserve position provided approximately 10 months of import cover, considerably above the commonly referenced international benchmark of three months.

The relatively strong reserve buffer gives the country additional capacity to meet external payment obligations and support confidence in the foreign exchange market.

The April figures also suggest that the improvement in the naira was not driven solely by increased dollar supply. A substantial reduction in outflows played an important role in strengthening Nigeria’s net FX position.

For businesses and consumers, sustained stability in the currency market could provide some relief from the uncertainty associated with sharp exchange-rate movements, particularly for companies dependent on imported inputs.

However, maintaining the improvement will depend on the continued availability of foreign exchange, investor confidence and the ability of the economy to attract sustainable inflows.

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The latest data therefore offer an encouraging snapshot of Nigeria’s currency market in April, with FX demand falls 35% and substantially lower outflows combining to ease pressure on the naira.