CBN Records $731m Reserve Drawdown Amid FX Pressures

• Balancing FX Stability
• Reserve Pressures Mount
•  External Reserves Under Strain

The Central Bank of Nigeria’s latest reserve drawdown highlights the difficult trade-off between maintaining exchange rate stability and preserving long-term external resilience as FX reforms continue to test policy durability. Enam Obiosio writes…

In April 2026, data from the Central Bank of Nigeria (CBN) showed external reserves declined from $49.18 billion on April 1 to $48.45 billion by April 23, a $731million drawdown, averaging $233million weekly, with sharper outflows early in the month before moderating. Mr. Olayemi Cardoso, Governor of the CBN, maintained that the decline “should not be a cause for concern”. The movement follows a March dip from above $50.08 billion to $49.61 billion, reflecting continued pressure from foreign exchange interventions, external obligations, and liquidity management under ongoing exchange rate reforms.

DECISION HIGHLIGHT
The CBN continues active reserve utilisation to stabilise the foreign exchange market while managing external commitments.

DECISION MEMO
The April drawdown underscores the CBN’s balancing act between exchange rate stability and reserve adequacy. Early-month outflows suggest intensified intervention to defend currency stability or meet external liabilities, while the subsequent moderation indicates tactical recalibration, possibly reflecting reduced intervention intensity or improved inflows.

Cardoso’s reassurance signals policy intent to frame reserve volatility as cyclical rather than structural. However, the reversal from January’s inflow-driven build-up highlights fragility in external liquidity conditions, particularly given Nigeria’s dependence on oil receipts and episodic capital inflows.

The reserve level, still above $48bn, provides a buffer relative to historical benchmarks, yet the trajectory suggests that sustaining exchange rate reforms will continue to draw on reserves in the absence of stronger non-oil inflows. The central issue remains whether current reserve utilisation is supporting a transition to a more market-driven foreign exchange regime or merely smoothing volatility.

DATA BOX
April 1 reserves: $49.18bn
April 23 reserves: $48.45bn
Total decline: $731m
Average weekly decline: approximately $233m
March movement: above $50.08bn to $49.61bn
January 2026 movement: +$509m (first 22 days)
2025 comparison: approximately $37.83bn same period
CBN projection: $51bn reserves by end-2026

WHO WINS / WHO LOSES
Winners: Importers and foreign exchange users benefiting from liquidity support; short-term currency stability.
Losers: Reserve buffer resilience; policymakers if sustained drawdowns constrain intervention capacity.

POLICY SIGNALS
Indicates continued managed transition in foreign exchange policy; prioritises exchange rate stability and liquidity management over reserve accumulation in the short term.

INVESTOR SIGNAL
Mixed signal, reserve levels remain relatively strong, supporting confidence, but continued drawdowns raise concerns over sustainability of foreign exchange interventions and external balance strength.

RISK RADAR
Sustained reserve depletion; oil revenue volatility; weak non-oil inflows; pressure on exchange rate stability; policy credibility risk if reserve targets are not met; exposure to external shocks affecting balance of payments.