Nigeria’s FX market turnover falls to $1.63bn as trading activity normalises

By Our Reporter

Nigeria’s foreign exchange market experienced a sharp moderation in trading activity during the second week of July, with total transactions across the FX Spot and Derivatives markets falling 46.57 per cent to $1.631 billion, compared with $3.053 billion recorded in the preceding week.

According to the latest weekly foreign exchange market commentary released by FMDQ, the decline represents the steepest week-on-week contraction in transaction value recorded so far in 2026. However, market data suggests the slowdown reflects a return to more typical trading levels after an exceptionally strong opening week of July rather than weakening liquidity in the official foreign exchange market.

The $1.422 billion decline followed three consecutive weeks of rising market activity that culminated in turnover exceeding the $3 billion mark during the week ended July 3.

Average daily turnover also fell sharply to $326.22 million, down from $610.60 million recorded a week earlier, indicating lower participation by banks, corporate customers and other authorised market participants throughout the five-day trading period.

FMDQ data showed that both the spot and derivatives segments recorded significant declines.

FX Spot transactions, which accounted for the overwhelming share of market activity, dropped 46.62 per cent to $1.580 billion from $2.960 billion in the previous week. Average daily spot turnover declined to $315.98 million, compared with $591.91 million a week earlier.

Despite the contraction, the spot market remained dominant, accounting for 96.86 per cent of total FX turnover, almost unchanged from 96.94 per cent recorded in the preceding week.

Similarly, FX Forwards turnover declined 45.19 per cent to $51.22 million from $93.45 million, while average daily forward transactions fell from $18.69 million to $10.24 million.

The forward market’s share of total transactions remained broadly stable at 3.14 per cent, compared with 3.06 per cent in the previous week, indicating that demand for hedging instruments remained resilient despite the overall decline in trading volumes.

Market analysts attribute the week’s lower turnover largely to reduced import-related FX demand, lighter interbank positioning and the seasonal moderation in corporate foreign exchange requirements after the busy quarter-opening trading period.

Although turnover declined significantly from the previous week, transaction volumes remained broadly comparable with levels recorded in late June, suggesting that underlying market demand remains relatively stable.

The latest figures therefore point to a normalisation of market activity rather than a deterioration in liquidity within Nigeria’s official foreign exchange market.

Recent FMDQ data illustrates the volatility in weekly FX turnover.

During the week ended June 19, total market turnover rose to $2.32 billion as demand strengthened across the official market. Trading activity increased further to $2.84 billion in the week ended June 26 before climbing to $3.05 billion in the week ended July 3, representing the highest weekly turnover in about three months, driven largely by increased spot market transactions.

While the latest reporting week recorded a sharp pullback, overall market activity remains within the range observed over recent weeks.

FMDQ’s weekly statistics capture transactions executed between Dealing Member banks, authorised dealers and their clients, making the report one of the most comprehensive indicators of liquidity and trading activity in Nigeria’s official foreign exchange market.

The market continues to operate under the unified, market-determined exchange rate framework introduced by the Central Bank of Nigeria in June 2023.