Nigeria’s FX market turnover recorded its steepest weekly decline of 2026, falling by 46.57% to $1.63 billion in the week ended July 10, according to data from the Financial Markets Dealers Quotations (FMDQ). The sharp drop comes after the market posted an impressive $3.05 billion turnover in the previous week, highlighting the volatility that has characterized foreign exchange trading in recent months. Market analysts, however, believe the decline reflects a temporary slowdown rather than a deeper liquidity challenge.
The latest figures show that both the FX Spot and Derivatives markets experienced significant contractions. FX Spot transactions, which account for the bulk of market activity, plunged from $2.96 billion to $1.58 billion, while FX Forwards turnover fell from $93.45 million to $51.22 million. As a result, the daily average turnover dropped sharply from $610.60 million to $326.22 million, indicating reduced trading activity among banks, corporates, and institutional participants throughout the five-day trading week.
Industry observers attribute the slowdown to reduced import financing demand, lower interbank positioning, and a typical cooling-off period following the busy start of the third quarter. The previous week had witnessed unusually strong activity, pushing total turnover above the $3 billion mark for the first time in about three months. With many businesses having already met key foreign exchange requirements at the start of July, demand naturally eased during the latest reporting period.
Despite the decline, market fundamentals remain relatively stable. FX Spot transactions continued to dominate overall trading activity, accounting for nearly 97% of total turnover, while the share of FX Forwards remained largely unchanged. Analysts note that the sustained presence of hedging instruments in the market suggests that businesses and investors are still actively managing currency risks, even as overall transaction volumes have moderated.
The latest data reinforces the pattern of fluctuating trading volumes seen in Nigeria’s official foreign exchange market in recent weeks. Turnover had climbed steadily from $2.32 billion in the week ended June 19 to $2.84 billion a week later before reaching $3.05 billion in early July. While the recent decline may appear dramatic, experts say it represents a return to more typical trading levels rather than a sign of weakening market liquidity. As Nigeria continues to operate under its unified exchange rate framework introduced in 2023, investors will be watching closely to see whether activity rebounds in the coming weeks.
source: Nairametrics
