Dollar demand falls 35% as naira holds firm

Demand for foreign exchange by end-users in Nigeria experienced a notable decline of 35.23 percent, dropping to $3.42 billion in April 2026. This reduction in demand has eased pressure on the dollar market, contributing to modest gains for the naira.

The Central Bank of Nigeria's data revealed a decrease in foreign exchange utilization across economic sectors during April. The monthly average exchange rate saw an improvement of 1.38 percent, moving from N1,379.98 per dollar in March to N1,361.22 in April. By the end of the month, the naira closed at N1,374.94 against the dollar in the official market.

Visible imports constituted 41.92 percent of the total FX utilization, with industrial activities being the largest consumers among them. Invisible imports accounted for the remaining 58.08 percent, dominated by financial services. The overall decline in demand was accompanied by weaker activity in the official foreign exchange market, as average FX turnover fell by 26.97 percent.

Despite the lower demand and turnover, Nigeria's net foreign exchange position strengthened in April. Aggregate FX inflows decreased slightly, but total outflows dropped more significantly, leading to a net inflow of $5.85 billion. The country's external reserves remained stable at $48.32 billion, providing approximately 10 months of import cover, well above the international benchmark.