Nigeria’s naira traded mixed across foreign exchange markets on Tuesday, with the currency weakening to ₦1,383/$1at the official window while posting a modest gain in the parallel market, as external reserves edged lower.
Data from the Central Bank of Nigeria (CBN) showed the naira closed at ₦1,383/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on April 28, compared with ₦1,369/$1 a day earlier. The ₦14 decline represents a 1.01% depreciation and signals renewed demand pressure at the formal market.
In the parallel market, however, the naira strengthened marginally to ₦1,385/$1 on April 29 from ₦1,390/$1 previously, narrowing the spread between both markets to just ₦2.
The near convergence of official and street rates marks one of the tightest spreads in recent months and may reflect improved liquidity conditions, stronger market confidence, or more effective price discovery under Nigeria’s managed float regime.
Other major parallel market quotations were unchanged, with sterling trading at ₦1,840/£1, the euro at ₦1,600/€1, and the Canadian dollar at ₦1,000/CAD1.
External Reserves Edge Lower
Meanwhile, Nigeria’s gross external reserves slipped to $48.389 billion as of April 27, down from $48.437 billion recorded on April 24. While the 0.10% decline is marginal, it adds to signs of gradual reserve drawdown after earlier losses reported this month.
The reserves level remains comparatively robust by recent standards, giving the CBN some buffer to manage liquidity shocks and support foreign exchange market interventions if required.
Exchange Rate Volatility Continues
The naira has experienced bouts of volatility through April, with the official rate moving from the low ₦1,340 range earlier in the month toward the ₦1,380 level. Parallel market rates have fluctuated within a broader ₦1,385–₦1,420 band depending on demand conditions and regional pricing.
For policymakers, the narrowing spread between markets is likely the more significant signal. Persistent divergence between official and unofficial rates has historically encouraged arbitrage and undermined confidence. A tighter spread suggests reforms aimed at unifying pricing mechanisms may be gaining traction, even as depreciation pressures remain.
Whether the convergence proves durable will depend on sustained FX inflows, reserve adequacy, and the CBN’s willingness to maintain transparency in market pricing
