FMDQ turnover hits N426.51trn as FX, OMO dominate market

Nigeria’s financial markets recorded N426.51 trillion in turnover between January and July 2026, with foreign exchange transactions and Central Bank of Nigeria (CBN) Open Market Operations (OMO) Bills accounting for a significant share of activity as banks and investors continued to reposition portfolios across the FX, fixed-income and money markets.

The seven-month turnover puts FMDQ Exchange on course for another strong annual performance, having already reached about 63 per cent of the N676.71 trillion recorded for the entire 2025 financial year.

The sharp expansion in activity reflects strong demand for foreign exchange and short-term government securities, as market participants respond to liquidity conditions, elevated interest rates and changing expectations about inflation and monetary policy.

The FMDQ report showed that FX transactions remained the largest individual contributor, with total FX market turnover reaching $20.66 billion, equivalent to N28.38 trillion, in July alone. This represented a 43.39 per cent month-on-month increase from $14.41 billion in June.

FX spot transactions accounted for $18.23 billion, or 88.22 per cent of total FX turnover, while FX derivatives contributed $2.43 billion. Spot turnover increased 41.64 per cent month-on-month, while derivatives turnover rose 58.01 per cent.

Within derivatives, FX swaps remained the dominant instrument at $2.05 billion, accounting for 84.33 per cent of derivatives turnover, while FX forwards contributed $380 million.

The increased FX activity came despite a relatively modest movement in the naira. The average spot exchange rate weakened to N1,373.43/$ in July, from N1,368.14/$ in June, while the naira traded within a narrower range of N1,361-$1,383.50 compared with N1,356-$1,389 in June.

OMO Bills were the second-largest driver of market activity. Fixed-income turnover reached N23.80 trillion in July, up 18 per cent from N20.17 trillion in June, with OMO Bills accounting for 53 per cent of fixed-income turnover.

The strong OMO activity reflects continued investor appetite for short-term CBN securities as investors seek attractive yields amid elevated interest rates and changing liquidity conditions.

Treasury Bills also recorded strong primary-market demand. The DMO sold N3.50 trillion in Treasury Bills in July, representing an 18.8 per cent increase from N2.95 trillion in June, while FGN Bonds worth N931.82 billion were sold, down 23.74 per cent month-on-month.

Demand remained strong, with Treasury Bills and FGN Bonds oversubscribed by 334.33 per cent and 44.89 per cent, respectively.

The money market also recorded a sharp increase in activity, with turnover rising 119.96 per cent to N11.46 trillion in July from N5.21 trillion in June. The increase was driven entirely by a 154.59 per cent jump in repo and buy-back transactions, while unsecured placements and takings declined sharply.

Across the secondary market, total turnover reached N63.64 trillion in July, representing a 41.23 per cent month-on-month increase and a 36.40 per cent year-on-year rise. FX and CBN Bills jointly accounted for 64.42 per cent of secondary-market transactions.

The report also showed that Nigeria’s one-year inflation-adjusted sovereign yield remained positive at 4.01 per cent, indicating that investors were still earning returns above inflation on one-year government securities.

The acceleration in market activity underscores the increasing importance of FMDQ Exchange to Nigeria’s financial system, particularly in providing liquidity across foreign exchange, government securities and money-market instruments.

For investors, the figures point to a market where fixed-income and FX instruments remain central to portfolio allocation, while the strong demand for Treasury Bills and OMO Bills suggests that elevated yields continue to attract capital despite expectations of eventual rate moderation.

The continued strength of FMDQ turnover also highlights the scale of liquidity flowing through Nigeria’s formal financial markets, with the seven-month N426.51 trillion figure already representing nearly two-thirds of the previous full-year record.