Dollar demand falls 35% to $3.42bn in Nigeria as lower FX outflows and stronger net inflows help the naira gain ground in April

Dollar demand in Nigeria fell by 35.23 per cent to $3.42bn in April 2026, according to Central Bank of Nigeria data, as reduced foreign exchange outflows and stronger net inflows eased pressure on the currency market and helped the naira make modest gains.

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The decline in demand came alongside a 1.38 per cent improvement in the naira’s monthly average exchange rate, which strengthened 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 on the Nigerian Foreign Exchange Market, compared with N1,386.72 at the end of March.

The figures point to a quieter foreign exchange market, although they do not by themselves establish that the improvement represents a lasting change in currency conditions.

The CBN data showed that visible imports accounted for 41.92 per cent of total foreign exchange utilisation, while invisible imports made up the remaining 58.08 per cent.

Industrial activities were the largest users of FX among visible imports, accounting for 37.44 per cent of utilisation. Manufactured products followed at 21.85 per cent, while oil imports accounted for 20.11 per cent and food products 14.47 per cent.

Transport-related imports represented 3.54 per cent, with minerals and agriculture accounting for 1.47 per cent and 1.12 per cent respectively.

Within invisible imports, financial services dominated, accounting for 91.51 per cent of utilisation. Business services made up 4.37 per cent, transport services 2.58 per cent and communication services 0.84 per cent.

Activity in the official FX market also weakened. Average foreign exchange turnover fell 26.97 per cent to $442.54m in April from $605.93m in March.

Despite the softer demand and lower turnover, Nigeria’s net foreign exchange position improved sharply during the month.

Net FX inflows increased to $5.85bn in April from $4.16bn in March, largely because outflows declined more rapidly than inflows.

Aggregate FX inflows actually fell to $8.71bn from $9.70bn. However, total outflows dropped to $2.86bn from $5.54bn, producing a substantially stronger net position.

The banking system recorded a net outflow of $180m, a marked improvement from the $1.66bn net outflow recorded in March. Autonomous sources, meanwhile, generated a net inflow of $6.02bn.

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

The CBN says foreign exchange reserves provide a buffer against external shocks, support confidence in the currency and help the central bank meet the country’s external obligations.

The April figures come as the CBN continues efforts to deepen the country’s foreign exchange market and strengthen confidence in the naira.

In May, the central bank introduced the fourth edition of its Foreign Exchange Manual, describing the framework as part of efforts to improve transparency, efficiency and market credibility.

The central bank has also maintained a relatively tight monetary policy stance.

Its Monetary Policy Committee left the Monetary Policy Rate at 26.5 per cent at its May meeting, while retaining the Cash Reserve Requirement for deposit money banks at 45 per cent.

For businesses and households, a more stable naira can reduce some of the uncertainty surrounding imported goods, raw materials and foreign currency obligations.

However, the April data should be read alongside broader economic conditions, including inflation, import costs and the availability of foreign exchange.

The CBN’s official exchange-rate data defines the NFEM rate as the volume-weighted average rate in the Nigerian Foreign Exchange Market, providing the benchmark for official market pricing.

The combination of falling dollar demand, sharply lower outflows and stronger net FX inflows therefore offered a welcome respite for the naira in April.

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Whether that improvement can be sustained will depend on the strength and consistency of foreign exchange inflows, demand from importers and other users, reserve levels and the effectiveness of ongoing reforms to Nigeria’s currency market.