Is Naira in Trouble? CBN Dismisses Reports on Reserves Decline, Reveals External Buffers
- Nigeria's external reserves remain strong, providing a buffer against global economic volatility
- CBN reassures investors that reserve fluctuations pose no risk to Nigeria's economic stability
- Nigeria's reforms and market-driven exchange rate enhance resilience against international shocks
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s external reserves remain robust and strong despite global volatility caused by oil price increases.
The Central Bank of Nigeria calmed frayed nerves over concerns regarding movements in the country’s external reserves, saying that fluctuations are normal and do not constitute any risk to economic stability.
Source: Twitter
External reserves: CBN reassures global investors
The apex bank’s boss, Olayemi Cardoso, disclosed this at the conclusion of the IMF/World Bank Spring Meetings in Washington DC.
Cardoso said Nigeria’s external reserves position is robust, supported by solid buffers built through recent policy reforms.
The CBN helmsman said that the current reserves are above international benchmarks, giving a comfortable cushion against external shocks.
Cardoso noted that Nigeria’s reserves can cover about 13 months of imports, which is significantly higher than the minimum threshold recommended by global financial institutions.
Cardoso said: “It is normal to see movements in reserves, and there is no cause for concern. We are in a very comfortable position relative to global benchmarks.
Nigeria’s exchange rate is now stable
He stressed that the structure of Nigeria’s foreign policy exchange rate market has evolved, reducing the relevance of short-term reserve fluctuations relative to previous years.
According to him, the market is now more liquid and market-driven, with less reliance on the apex bank. He cited CBN’s dominant role in the past in determining the market.
“Today, the market has greater liquidity, and investors can move in and out more freely,” he said.
Cardoso noted that what is now important is the overall direction and the strength of the system, rather than short-term swings.
Nigeria’s reforms are paying off - Edun
Meanwhile, the Minister of Finance and Coordinating Minister of the economy, Wale Edun, said Nigeria’s reforms are durable and sustainable.
“Across our engagements this week, there was strong recognition and commendation of Nigeria’s reform programme.
"These reforms have strengthened our economic fundamentals and restored confidence.
"They have also placed the country in a better position to withstand external shocks, including those arising from the ongoing geopolitical tensions in the Middle East,” Edun said.
According to a BusinessDay report, the finance minister said that with the transition to market-reflective pricing for foreign exchange and petroleum products, the economy is adjusting relatively smoothly, without resorting to distortionary controls, unsustainable subsidies, or rapid depletion of reserves.
“This improved resilience was widely acknowledged in our engagements with the IMF, the World Bank, and other development partners and bilateral counterparts,” he said.
Naira remains competitive
Cardoso also linked Nigeria’s improved resilience to deliberate exchange rate and broader macroeconomic policy actions in the past two years.
He stated that these measures have helped Nigeria to absorb global shocks more effectively, stating that Nigeria experienced minimal shocks during disruptions affecting several emerging markets.
Legit.ng had reported that Nigeria’s external reserves fell to a little over $48 billion, from $50 billion recorded in January.
Analysts believe that the CBN’s aggressive defence of the naira has contributed to the decline.
The Nigerian currency faced renewed volatility in March, depreciating and closing the month at N1,387 per dollar.
Source: Getty Images
The naira rebounded briefly in April, trading at N1,342.50 per dollar at the Nigerian Foreign Exchange Market (NFEM) as of Friday, April 18, 2026.
Naira ranks second-best-performing African currency
Legit.ng earlier reported that Nigeria’s naira has staged a stunning comeback in 2026, emerging as one of the continent’s strongest currencies and capturing the attention of investors worldwide.
Despite raging geopolitical tensions and wild swings in global markets, the naira now ranks second-best performing African currency against the US dollar year-to-date—trailing only the Zambian kwacha.
Head of Market Research at FXTM, Lukman Otunuga, highlighted the naira’s unexpected strength in a fresh statement, according to a report by ThisDay.
Source: Legit.ng
