Nigeria’s foreign exchange market staged a strong comeback in the week ended July 17, 2026, as soaring FX spot transactions lifted total market turnover by 46.27 percent to $2.39 billion. The latest report from FMDQ Exchange revealed that increased demand for immediate foreign currency settlement helped reverse the sharp decline recorded in the previous week, signaling renewed activity and stronger liquidity across the market.
The surge was largely driven by the FX spot market, which accounted for an overwhelming 99.39 percent of all foreign exchange transactions during the period. Spot market turnover climbed to $2.37 billion from $1.58 billion a week earlier, representing a significant 50.09 percent increase. Analysts say the growth reflects heightened demand from businesses, banks, investors, and importers seeking quick access to foreign currency to meet immediate financial obligations.
While spot transactions flourished, the derivatives market experienced a sharp slowdown. FX forward contracts, which are commonly used by businesses to hedge against future exchange rate fluctuations, dropped by 71.69 percent to $14.5 million from $51.22 million recorded in the previous week. As a result, derivatives contributed just 0.61 percent of total market turnover, highlighting a noticeable shift in trading preference among market participants.
Industry observers believe the trend points to growing confidence in Nigeria’s near-term foreign exchange outlook. Improved foreign reserve levels and relative stability in the exchange rate appear to be reducing the urgency for businesses to lock in future rates through forward contracts. Instead, many market players are focusing on immediate transactions to meet operational and commercial needs.
The latest figures also underscore the critical role of liquidity in sustaining activity within Nigeria’s foreign exchange market. Although the derivatives segment remains important for managing future currency risks, the week’s performance shows that spot transactions continue to be the engine powering market growth. With average daily turnover rising to $477.16 million, the market’s rebound offers a positive signal for businesses and investors closely monitoring Nigeria’s foreign exchange environment.
source: nairametrics
