Nigeria’s foreign exchange market recorded a sharp increase in trading activity as weekly dollar turnover rose by 98.58 per cent to $3.37 billion in the week ended October 9, 2026, following a decline in transactions in the previous week.
Data from FMDQ showed that total foreign exchange transactions increased from $1.70 billion in the week ended October 2 to $3.37 billion, representing an additional $1.67 billion in market activity.
The rebound followed a 35.41 per cent decline recorded in the preceding week, bringing turnover close to the $3.39 billion recorded in the week ended September 11.
However, the increase reflects higher transaction volumes and does not necessarily mean that dollar supply has improved sufficiently or that the naira is set to strengthen.
Spot Transactions Drive Growth
Spot transactions accounted for the largest share of activity during the period, rising by 98.37 per cent to $3.24 billion from $1.63 billion in the previous week.
These transactions involve the purchase and sale of foreign currencies for near-immediate delivery and are commonly used by banks, importers, exporters and other businesses to meet their foreign exchange obligations.
The increase in spot transactions contributed approximately $1.61 billion to the overall rise in turnover, accounting for most of the additional activity recorded during the week.
Spot deals represented 96.08 per cent of total foreign exchange turnover, highlighting the dominance of immediate currency transactions in Nigeria’s formal foreign exchange market.
Average daily turnover across the market also increased to $673.97 million from $424.24 million in the preceding week.
Forward Transactions Also Increase
Foreign exchange forward transactions recorded an even faster percentage increase, although their contribution to total market turnover remained relatively small.
According to the FMDQ figures, forward transactions rose by 103.85 per cent to $131.95 million from $64.73 million in the previous week.
Forward contracts allow buyers and sellers to agree on an exchange rate for a currency transaction to be completed at a future date.
Businesses use them to manage exchange rate uncertainty and plan payments to overseas suppliers.
Despite the increase, forward transactions accounted for only 3.92 per cent of total turnover, compared with the much larger share recorded by spot transactions.
The figures do not establish whether the rise in forward trading resulted from increased demand for currency protection or other market activities.
Implications for Businesses and the Naira
The increase in foreign exchange turnover is significant for businesses that depend on imported raw materials, machinery, equipment and finished products.
Access to foreign currency remains an important factor in determining import costs, pricing decisions and operating expenses for Nigerian manufacturers and other businesses with international payment obligations.
Higher trading activity can indicate increased participation in the formal market and more transactions between authorised dealers and their customers.
However, turnover alone does not show whether buyers can obtain dollars more easily or at more favourable exchange rates.
The naira’s performance will continue to depend on factors including the supply of foreign currency, demand from importers and other market participants, capital inflows and investor confidence.
The latest rebound also comes after considerable fluctuations in weekly turnover, with transactions declining sharply before recovering to nearly the levels recorded in September.
The shorter reporting week around Nigeria’s October 1 Independence Day holiday may also have influenced the week-on-week comparison.
In its weekly market update for the period ended October 9, Cordros Securities highlighted the importance of sustained foreign portfolio participation and a recovery in domestic sources of foreign exchange supply to the near-term outlook.
For Nigeria, maintaining a more active and liquid foreign exchange market will be important for businesses seeking to meet their dollar obligations and for investors monitoring the country’s currency market.
While the latest figures show a strong recovery in trading activity, the sustainability of the improvement will depend on whether foreign exchange inflows remain resilient and market liquidity can be maintained in the coming weeks.
Source: FMDQ Exchange and Cordros Securities.
