Nigeria’s foreign exchange market has kicked off the third quarter of 2026 on a strong note, recording its highest weekly turnover in more than three months. Fresh data from FMDQ revealed that total transactions across the FX Spot and Derivatives markets climbed to $3.053 billion in the week ended July 3, representing a 7.67% increase from the $2.835 billion recorded a week earlier. The sharp rise highlights growing confidence among market participants and points to improving liquidity conditions within Nigeria’s official foreign exchange market.
The increase was largely driven by stronger activity in the FX Spot market, which remained the dominant segment. Spot transactions rose by $188.16 million week-on-week to $2.96 billion, accounting for nearly 97% of total market turnover. Daily average spot transactions also increased significantly, rising to $591.91 million from $554.28 million in the previous week. Analysts say the growth reflects stronger demand from businesses, importers, and financial institutions seeking foreign currency for trade and operational needs as economic activities gathered pace at the start of the quarter.
A notable highlight of the week was the remarkable growth in FX Forwards, which surged by 45.92% to $93.45 million. The sharp increase suggests that more corporates, importers, and institutional investors are actively seeking protection against potential exchange rate fluctuations. By locking in exchange rates ahead of future transactions, businesses are increasingly adopting risk management strategies to shield themselves from uncertainty in the currency market.
Market observers believe the rising use of FX Forwards is a sign of a more sophisticated and mature foreign exchange market. Although derivatives still account for a relatively small portion of total turnover, their share expanded from 2.26% to 3.06% within a week. This growing appetite for hedging instruments indicates that Nigerian businesses are becoming more proactive in managing currency risks, particularly in an environment where exchange rate stability remains a key concern.
The latest figures also show a broader recovery in market activity. Compared with the $2.323 billion turnover recorded in the week ended June 19, total FX transactions have increased by approximately $730 million over two consecutive weeks. With daily average turnover reaching $610.6 million—the highest level of the current quarter—the trend suggests stronger participation and improved liquidity as Q3 begins. However, the continued absence of activity in the Exchange-Traded FX Futures segment underscores the market’s preference for over-the-counter transactions, leaving room for further development in Nigeria’s formal derivatives market.
source: nairametrics