By Chinwendu Obienyi
Nigeria’s foreign exchange (FX) market witnessed a sharp rebound in activity last week, as total turnover surged by 74.57 per cent to $2.26 billion for the week-ended September 19, 2025, compared with $1.29 billion in the previous week.
Data gathered from FMDQ Exchange showed that the week-on-week (w/w) increase was driven exclusively by stronger activity in the FX spot market, while no trades were recorded in the FX derivatives segment.
The naira also posted gains during the week, appreciating by 2.2 percent WoW to N1,586.50/$1, supported by a $150 million intervention by the Central Bank of Nigeria (CBN) and steady offshore inflows.
Gross FX reserves rose for the eleventh consecutive week, climbing by $291.41 million w/w to $41.95 billion as of September 18.
Market dealers said the improvement in spot trading reflected rising demand from importers and corporates, coupled with increased foreign portfolio inflows seeking opportunities in Nigerian assets amid a more stable exchange rate outlook.
“Liquidity conditions in the spot segment have improved considerably, thanks to the CBN’s targeted interventions and renewed offshore interest. This has encouraged banks and their clients to engage more actively compared to the slowdown we saw earlier in the month”, they said.
According to FMDQ data, trades between FMDQ Dealing Member (Banks)/Authorised Dealers and their clients accounted for the bulk of turnover.
Notably, the derivatives market remained quiet, with no trades in forwards, futures, swaps or options.
Analysts attributed this to a preference for immediate spot transactions and lingering caution among corporates amid global and domestic macroeconomic uncertainties.
In the forwards market, the naira strengthened across contract tenors: 1-month (+0.7 per cent to N1,522.49/$1), 3-month (+0.7 per cent to N1,575.50/$1), 6-month (+0.8 per cent to N1,650.02/$1), and 1-year (+0.9 per cent to N1,797.95/$1).
Analysts said the appreciation across forward rates, coupled with rising reserves, reflects improving confidence in the CBN’s policy stance and liquidity management.
“In the near term, we expect the naira to remain broadly stable, underpinned by resilient FX market liquidity and improving domestic inflows. Portfolio inflows could be further supported by the dovish shift in global monetary policy and declining treasury yields, which enhance investor appetite for naira-denominated assets”, analysts at Cordros Research said.
The outlook, they said, is further buoyed by stronger non-oil export receipts and fewer incentives for speculative positioning, which together suggest a more balanced FX market.
While risks remain from oil production shortfalls, global interest rate shifts, and inflationary pressures, market participants see momentum in Nigeria’s FX space as broadly positive.
“The key will be sustaining this confidence. As long as the CBN maintains consistency and transparency, and liquidity keeps flowing, both spot and forward markets should remain resilient”, they said.
For now, the rebound in turnover, appreciation of the naira, and steady reserve growth signal renewed optimism in Nigeria’s FX market trajectory.
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