Improved global sentiment and easing geopolitical tensions lift Nigeria’s currency despite dip in external reserves…..
The naira sustained its upward momentum on Friday, closing at N1,342.5 per dollar and extending gains from the previous week’s N1,355.25/$, as a softer U.S. dollar and improving global sentiment provided support.
Figures published by the Central Bank of Nigeria show the local currency opened the week at N1,358/$ on Monday before strengthening to N1,348/$ on Tuesday.
The rally continued midweek, with the naira appreciating to N1,341.99/$ on Wednesday and N1,341.01/$ on Thursday, reflecting steady demand and improved market confidence.
This positive run marks a notable recovery from the prior week, when the currency had weakened to as low as N1,389/$ before staging a gradual rebound.
However, the gains come amid a slight decline in Nigeria’s external reserves. Data indicates reserves fell to $48.65 billion as of April 16, 2026, down from $48.72 billion at the start of the week and $48.81 billion at the close of the previous week.
Analysts point to global factors as a key driver behind the naira’s recent strength. Chief among them is the weakening of the U.S. dollar, which has reduced pressure on emerging market currencies.
The dollar index slipped by 0.49% to 97.73 during the period, marking its lowest level since late February and extending a two-week decline of roughly 2.5%, its sharpest drop in a year.
The naira’s retreat has been partly attributed to easing geopolitical tensions, particularly around the Strait of Hormuz, where assurances of continued shipping activity helped calm global markets. Reduced demand for safe-haven assets such as the dollar has, in turn, boosted currencies like the naira.
Other major currencies also posted gains against the dollar. The euro rose by 2.7% over the week, while the Japanese yen strengthened as investors adjusted positions in response to shifting risk sentiment.
For Nigeria, the combination of external tailwinds and improving market dynamics has provided short-term relief for the naira. However, analysts caution that sustaining the rally will depend on continued foreign inflows, stable reserves, and broader global economic conditions in the weeks ahead.
