From Adanna Nnamani, Abuja
Nigeria’s foreign exchange (FX) utilisation rose to $18.34 billion in the second quarter of 2026, its highest level since the third quarter of 2011, as financial services alone accounted for more than half of total demand.
Data from the Financial Markets Dealers Association (FMDA) showed that financial services consumed $9.64 billion, representing 52.58 per cent of total FX utilisation during the quarter.
The figure represented a 72.81 per cent increase from the $5.58 billion recorded in the corresponding period of 2025, translating to an additional $4.06 billion in demand.
The FMDA, in its Q2 2026 FX Market Update, which draws on data from the Central Bank of Nigeria (CBN), said total foreign exchange utilisation rose by 12.84 per cent from approximately $16.25 billion in the first quarter of 2026. It also increased by 52.42 per cent from $12.03 billion recorded in the second quarter of last year.
The report indicated a growing concentration of foreign exchange demand in services and financial transactions, rather than merchandise imports.
Invisible transactions, which cover services and financial payments outside merchandise imports, accounted for $13.24 billion, representing 72.19 per cent of total FX utilisation in the quarter.
The amount was 93.16 per cent higher than the $6.85 billion recorded in the corresponding period of 2025, with financial services contributing the largest share of the increase.
Business services also recorded a sharp rise, with foreign exchange utilisation increasing by 191.39 per cent to $1.66 billion from $570.41 million a year earlier.
Similarly, demand for other services rose by 118.66 per cent to $1.12 billion, further highlighting the growing importance of service-related transactions in the country’s foreign exchange market.
In contrast, import-related demand declined by 1.49 per cent to $5.10 billion during the period. Within the import category, industrial imports fell by 22.67 per cent to $1.86 billion, while oil imports dropped by 9.75 per cent to $1.25 billion.
However, foreign exchange demand for manufactured products increased by 77.73 per cent to $982.09 million.
The report linked the surge in financial services demand to cross-border investment and payment flows but did not provide a detailed breakdown of the transactions. It therefore did not establish how much of the $9.64 billion was attributable to investment repatriation or other specific financial activities.
The association also identified $542.56 million in unallocated invisible demand, noting that the June figures did not fully reconcile with the reported total.
On the supply side, Nigeria relied increasingly on autonomous sources of foreign exchange during the quarter, even as dollar sales by the CBN declined significantly.
Autonomous inflows rose to $23.31 billion, their highest level since the first quarter of 2020, accounting for 74.15 per cent of total FX inflows. This was up from 68.48 per cent in the first quarter of 2026 and 63.64 per cent in the corresponding period of 2025.
Total foreign exchange inflows, however, fell by 2.96 per cent to $31.43 billion compared with the preceding quarter, although the figure remained 14.04 per cent higher year-on-year.
CBN-sourced inflows declined by 20.44 per cent to $8.12 billion, while the apex bank’s dollar sales fell by 66.73 per cent to $418.08 million from $1.26 billion in the first quarter. Compared with the $3.17 billion recorded in the second quarter of 2025, FX sales dropped by 86.79 per cent.
According to the FMDA, the CBN sold a total of $1.67 billion in the first half of 2026, the lowest amount recorded for any half-year period since its data series began in 2008.
Meanwhile, total foreign exchange outflows declined by 19.22 per cent to $8.93 billion, while net FX flows rose to $22.50 billion, the highest level since the fourth quarter of 2019.
Cumulative net FX flows for the first half of the year stood at $43.84 billion, representing a 47.24 per cent increase year-on-year.
The figures come amid a broader shift in Nigeria’s foreign exchange market towards service-related payments. Data cited in the report showed that total FX demand reached $50.93 billion in 2025, with invisible transactions accounting for $30.99 billion, compared with $19.94 billion for merchandise imports.
Meanwhile, Nigeria’s gross external reserves stood at $55.07 billion on 8 October 2026, up from $54.95 billion on October 2, according to CBN data.
The FMDA’s weekly report published on October 12 described the reserves level as the highest since December 2008.