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Nigeria’s foreign exchange (forex) market recorded a sharp rebound in trading activity as dollar transactions nearly doubled to $3.37 billion in the week ended October 9, 2026, from $1.70 billion in the preceding week.
Data from FMDQ showed that total foreign exchange turnover increased by 98.58 per cent, representing an additional $1.67 billion in transactions and reversing a 35.41 per cent decline recorded in the previous reporting week.
The recovery was driven largely by spot transactions, which rose by 98.37 per cent to $3.24 billion from $1.63 billion, accounting for approximately 96 per cent of total turnover during the week.
Spot transactions involve the purchase and sale of foreign currencies for near-immediate delivery and are commonly used by banks, businesses and other market participants to meet their foreign exchange needs.
Forward transactions also recorded significant growth, increasing by 103.85 per cent to $131.95 million from $64.73 million in the preceding week.
Despite the increase, forward transactions accounted for just 3.92 per cent of total turnover, underscoring the dominance of spot trading in the reported market activity.
Average daily foreign exchange trading rose to $673.97 million from $424.24 million in the previous week.
The latest turnover represents a recovery to levels recorded in September, when transactions reached $3.39 billion in the week ended September 11, before declining in subsequent reporting periods.
However, the increase in trading volume does not necessarily indicate improved dollar availability or guarantee stability in the naira exchange rate.
Commenting on the market outlook in its weekly economic and market update, Overview of Markets in the Week Ended 09 October 2026, Cordros Securities highlighted the importance of domestic and foreign currency inflows in sustaining liquidity.
The investment firm identified domestic inflows from the Central Bank of Nigeria, individuals, non-bank corporates, and exporters and importers as important components of the foreign exchange market.
It warned that the outlook for inflows would depend on the resilience of foreign portfolio participation and a recovery in domestic sources of foreign currency.
“In the near term, the outlook for forex inflows will depend on the resilience of foreign portfolio participation and the recovery of domestic inflows,” Cordros Securities stated.
The firm added that lower domestic yields and persistent geopolitical tensions could weaken the attractiveness of naira-denominated assets to foreign investors, potentially reducing portfolio inflows and putting pressure on foreign exchange liquidity.
Similarly, the Head of Research at GTI Securities Limited, Abiodun Ogunniyi, said the rebound in turnover could reflect renewed activity by exporters, foreign portfolio investors, offshore investors repatriating funds and other participants supplying dollars through authorised dealers.
He stressed that the composition of foreign currency supply would be crucial in determining whether the recovery could be sustained.
According to Ogunniyi, export proceeds, foreign portfolio investments, diaspora remittances and foreign direct investments are among the sources that can contribute to foreign exchange 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,” he said.
He, however, cautioned that sustained improvement would depend on whether inflows continued rather than being driven by temporary portfolio movements or isolated transactions.
The latest rebound signals increased trading activity, but its implications for exchange rate stability will depend on the strength of foreign currency inflows, demand for dollars and broader economic conditions in the coming weeks.
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