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.
Spot transactions drive FX rebound
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 latest figures show that:
- Total foreign exchange trading increased by $1.67 billion to $3.37 billion, representing a 98.58% increase.
- Spot transactions rose by $1.61 billion to $3.24 billion, an increase of 98.37%.
- Forward transactions more than doubled from $64.73 million to $131.95 million.
- Average daily trading increased to $673.97 million from $424.24 million in the previous week.
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.
FX forward transactions double
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.
The figures reveal that:
- Forward transactions increased by approximately $67.22 million during the reporting week.
- Forward trading accounted for just 3.92% of total foreign exchange turnover.
- Spot transactions continued to dominate the market, accounting for the remaining 96.08% of trading activity.
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.
Dollar trading returns near September levels
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.
- The latest increase to $3.37 billion therefore represents a recovery to nearly the same level recorded a month earlier.
- The recent figures highlight three important developments:
- Foreign exchange turnover has fluctuated sharply in recent weeks, reflecting changes in reported trading activity.
- The latest recovery was driven overwhelmingly by spot transactions, which accounted for approximately 96% of the increase.
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.
Experts highlight inflow sources:
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.
- “In the near term, the outlook for FX inflows will depend on the resilience of foreign portfolio participation and the recovery of domestic inflows. However, lower domestic yields and persistent geopolitical tensions could reduce the relative attractiveness of naira assets, weakening foreign portfolio inflows and adding pressure to FX liquidity,” Cordros Securities concluded.
The Head of Research at GTI Securities Limited, Mr. Abiodun Ogunniyi, provided more insights into FX inflows into Nigeria’s money market:
- “The sharp recovery in FX turnover could reflect renewed activity from exporters, foreign portfolio investors, offshore investors repatriating funds, and other participants supplying dollars through authorised dealers. However, the composition of actual dollar supply would be important in determining whether the recovery is sustainable.”
- “Export proceeds, foreign portfolio investment, diaspora remittances and foreign direct investment can all contribute to foreign currency supply, although they enter the market through different channels.”
- “If the latest increase in turnover is supported by stronger and more consistent inflows, it could improve transactions between buyers and sellers. The key is whether these inflows are sustained rather than driven by temporary portfolio movements or isolated transactions,” Ogunniyi concluded.
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.