Dollar trading in Nigeria nearly doubles to $3.37 billion in one week

The value of dollars traded in Nigeria’s foreign exchange market nearly doubled to $3.37 billion in the week ended October 9, 2026, from $1.70 billion the previous week, marking a sharp recovery in trading activity.

According to the latest figures from FMDQ, which tracks foreign exchange transactions involving authorised banks and their customers, total trading increased by 98.58%, representing an additional $1.67 billion in transactions.

The rebound followed a 35.41% decline in the previous week ended October 2, with most of the recovery coming from transactions involving the immediate purchase and sale of foreign currencies, commonly known as spot transactions.

Data from FMDQ shows that spot transactions rose from $1.63 billion to $3.24 billion during the week, accounting for approximately 96% of the increase in total foreign exchange trading.

Spot transactions involve buying or selling foreign currencies at prevailing exchange rates for near-immediate delivery.

Banks, businesses and other market participants commonly use them to meet their foreign currency needs.

For businesses that import goods, raw materials or equipment, these transactions provide a means of obtaining dollars to settle payments to overseas suppliers.

The increase in average daily trading also points to stronger activity during the reporting period, although differences in the number of trading days should be considered when comparing the two weeks.

Beyond the increase in spot trading, Nigeria’s foreign exchange market also recorded stronger activity in forward transactions, which allow businesses and investors to agree on an exchange rate for a future currency purchase or sale.

For example, a Nigerian company expecting to pay a foreign supplier in three months can use a forward contract to reduce uncertainty about how much naira it will need when the payment becomes due.

FMDQ data shows that forward transactions increased by 103.85% to $131.95 million during the week, compared with $64.73 million previously.

Despite the sharp increase in forward transactions, their relatively small share shows that most reported foreign exchange trading continues to involve currencies bought or sold for near-immediate delivery.

The increase in forwards also does not necessarily mean more businesses are protecting themselves against exchange rate risks, as the report does not provide a breakdown of the reasons behind the transactions.

The latest rebound brings foreign exchange trading activity close to levels recorded in September, following several weeks of sharp fluctuations in market turnover.

In the week ended September 11, total foreign exchange trading reached $3.39 billion before declining in subsequent reporting periods. By the week ended October 2, turnover had fallen to approximately $1.70 billion.

Higher trading volumes do not necessarily mean that dollars have become easier to obtain or that the naira will strengthen.

For Nigerian businesses, foreign exchange conditions remain important because they affect the cost of importing raw materials, equipment and other goods purchased from overseas.

A more active foreign exchange market can create additional opportunities for buyers and sellers to complete transactions. However, higher trading volumes alone do not guarantee improved dollar availability or greater exchange rate stability, analysts say.

In its weekly economic and market update titled “Overview of markets in the week ended 09 October 2026”, Cordros Securities provided an insight into the sources of FX inflows on FMDQ. Citing data from FMDQ, Cordros analysts highlighted two main sources, including domestic and foreign inflows.

Reviewing September inflow segments that saw a remarkable decline, the investment analysts highlighted domestic inflow sources across the CBN, Individuals, non-bank corporates and exporters/importers segments.

The Head of Research at GTI Securities Limited, Mr. Abiodun Ogunniyi, provided more insights into FX inflows into Nigeria’s money market:

The key question is whether the recovery in trading activity will continue and translate into better foreign exchange conditions for businesses and investors. That will depend on factors beyond trading volumes, including foreign currency inflows, demand for dollars and developments in the wider economy.

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Notify me of follow-up comments by email.

Naira likely to break below N1,300/$ amid high FX supply

Dangote Group projects naira at N1,330/$ by year-end, N1,385/$ average for 2026

Naira extends Bullish streak against British Pound at N1,767/£