FX turnover nears $1bn daily, strengthening naira stability as ma...

Nigeria’s foreign exchange market recorded its strongest liquidity in years during the first half of 2026, with daily turnover frequently approaching the $1 billion mark, reinforcing confidence in the naira and signalling that recent foreign exchange reforms are beginning to deliver a deeper and more efficient market.

Data from the Central Bank of Nigeria (CBN) showed that official foreign exchange turnover exceeded $31 billion between March and June, with several trading sessions crossing $900 million and a record $1.82 billion exchanged in a single day under the Nigerian Foreign Exchange Market (NFEM) framework.

The surge in market activity coincided with a modest appreciation of the naira, which strengthened from N1,431/$ at the beginning of the year to N1,376/$ at the close of June, representing a gain of N55, or 3.8 per cent, over the six months.

Although the currency’s appreciation attracted market attention, analysts said the more significant development was the sustained rise in market liquidity, which has improved price discovery, reduced exchange rate distortions and enabled the naira to absorb demand pressures more effectively.

According to CBN data, some of the busiest trading sessions during the period included $1.82 billion on May 12, the highest daily turnover recorded under the NFEM framework, $1.14 billion on March 10, $1.13 billion on March 13 and $1.07 billion on June 30.

Other notable sessions included $985.6 million on June 15, $984.1 million on March 23, $966.4 million on April 8, $923.6 million on June 25 and $910.8 million on June 29.

Market participants noted that the sustained increase in turnover, rather than isolated spikes, reflects broader participation by buyers and sellers, making the market more transparent and less susceptible to speculative pressures.

Liquidity gathered momentum as the year progressed. While comprehensive turnover data for January and February were unavailable, activity accelerated significantly from March as investor confidence returned to the official market.

March recorded three trading sessions with turnover above $980 million, while April maintained strong activity with transactions reaching $966.4 million on April 8 and $802.4 million on April 29.

May emerged as the busiest month after the record $1.82 billion traded on May 12, while June sustained the momentum with four trading sessions exceeding $900 million, suggesting that stronger liquidity has become structural rather than event-driven.

The interbank foreign exchange market also deepened during the period, with daily turnover generally ranging between $70 million and $250 million. One of the strongest sessions occurred on April 29 when interbank transactions approached $250 million, while several June trading sessions exceeded $170 million.

Trading activity also broadened considerably, with several sessions recording more than 350 individual transactions. On April 8 alone, 515 deals were executed, reflecting wider participation and reducing the influence of large individual trades on exchange rate movements.

The improvement in liquidity coincided with greater exchange rate stability. After appreciating from N1,431/$ in January to around N1,340/$ in February before weakening briefly in March, the naira traded within a relatively narrow range of N1,356/$ to N1,389/$ for most of the second quarter.