Nigeria’s foreign exchange market saw a dramatic turnaround last week, with the naira regaining ground and trading activity surging. According to fresh data, total FX turnover jumped 74.6 per cent to $2.26 billion for the week ending September 19, 2025 — up from $1.29 billion the previous week. The rally was fueled by renewed confidence in the market and a fresh injection of dollars by the Central Bank of Nigeria (CBN).
FMDQ Exchange figures show the rebound came almost entirely from the spot market, where demand from importers and corporates surged. In contrast, no trades were recorded in the derivatives segment, underscoring a shift toward immediate transactions. Market dealers say the CBN’s targeted $150 million intervention, coupled with steady offshore inflows, helped strengthen the naira by 2.2 per cent week-on-week to N1,586.50 per dollar.
Nigeria’s foreign reserves also rose for the 11th straight week, climbing by $291.4 million to $41.95 billion as of September 18. Dealers described “considerably improved” liquidity conditions in the spot segment, which encouraged banks and their clients to trade more actively than earlier in the month. Analysts view the uptick in reserves and turnover as signs of improving confidence in the CBN’s policy direction.
Forward contracts reflected the brighter outlook, with the naira strengthening across all tenors — including one-month (N1,522.49/$1) and one-year (N1,797.95/$1). Analysts attribute the gains to stronger non-oil export receipts, fewer incentives for speculation, and a dovish global monetary policy environment that is boosting appetite for naira-denominated assets.
Looking ahead, analysts expect the naira to remain broadly stable as FX liquidity and domestic inflows improve. While risks persist — from oil production shortfalls to global interest-rate shifts — traders say market momentum is positive. “The key will be sustaining this confidence,” one dealer noted. “As long as the CBN maintains consistency and transparency, both spot and forward markets should remain resilient.”
source: the sun