Nigeria's Weekly Dollar Trading Falls 22% to $2.62 Billion as Forward Deals Plunge

The value of dollars traded in Nigeria's foreign exchange market fell 22.23% to $2.62 billion in the week ended October 16, 2026, from $3.37 billion the previous week, citing the latest FMDQ report. The pullback came as spot trading slowed and forward transactions dropped sharply, reversing part of a near-doubling of turnover the week before.

Contents

01

A Week of Two Halves for FX Turnover

02

Forward Deals Fall Fastest, Spot Still Dominates

03

Naira Slips Slightly as Reserves Hold Above $55 Billion

A Week of Two Halves for FX Turnover

FMDQ data tracks foreign exchange transactions between authorised banks and their customers. Total trading fell by $749.15 million week on week, with the decline reversing part of the 98.58% jump recorded in the week ended October 9, when turnover climbed to $3.37 billion from $1.70 billion a week earlier.

That earlier rebound had been driven almost entirely by spot deals, which rose 98.37% to $3.24 billion from $1.63 billion and accounted for 96.08% of transactions in that week. Forward transactions also strengthened then, rising 103.85% to $131.95 million from $64.73 million, though they remained a small slice of the market at 3.92% of total turnover.

The swings highlight the uneven pattern of activity in Nigeria's formal foreign exchange market over recent weeks. Weekly turnover in the week ended October 9 came close to the $3.39 billion recorded in the week ended September 11, before weakening to about $1.70 billion in the week ended October 2 and then recovering almost completely.

Forward Deals Fall Fastest, Spot Still Dominates

Forward transactions, which let businesses and investors agree today on an exchange rate for a currency purchase or sale at a future date, fell 81.14% to $24.89 million from $131.95 million. They accounted for only 0.95% of total turnover, down from 3.92% a week earlier.

That drop is a weekly turnover figure, not a fall in outstanding forward contracts. It measures the contracts executed during the week. Spot transactions, which involve buying or selling dollars for near-immediate delivery, fell 19.83% to $2.60 billion from $3.24 billion, a decline of $642.09 million.

Spot trading made up about 85.7% of the dollar decline, while forwards made up about 14.3%. The forward market fell much faster in percentage terms, but spot trading accounted for most of the dollars lost. Spot trading now makes up almost all reported turnover, at about 104 times forward turnover, compared with about 24.5 times a week earlier.

The Punch, reporting the same FMDQ figures, put total spot and derivatives turnover at $2,620.70 million for the week. It said spot transactions fell to $2,595.81 million from $3,237.90 million, capturing a 99.05% share of the market with a daily average of $519.16 million, while derivatives turnover fell to a mere 0.95% share. The market's daily average turnover dropped to $524.14 million from $673.97 million the week prior.

Market analysts quoted in that report attributed the week-on-week decrease to the 19.83% ($642.09 million) fall in spot transactions and the 81.14% ($107.06 million) fall in derivatives comprising forwards. The report described the fluctuating liquidity as reflecting adjustments as participants navigate evolving monetary policy frameworks, shifting capital flows and macroeconomic pressures on foreign exchange availability and foreign portfolio investment.

Naira Slips Slightly as Reserves Hold Above $55 Billion

Despite the wide swing in forwards turnover, the naira appreciated across contract tenors in that segment of Nigeria's money market, according to the primary report. The naira also maintained a N1,765/£1 band against the British pound amid increased foreign exchange supply.

In the official market, Central Bank of Nigeria data showed the naira weakened to N1,333.72 per dollar on Monday, October 19, from N1,332.26 on Friday, October 16, a depreciation of N1.46. At the parallel market, the naira weakened to N1,375 per dollar on Monday from N1,370 the previous week. The country's external reserves stood at $55.09 billion at the end of the previous week, according to the apex bank.

The World Bank's October 2026 Africa Economic Update, which tracked 22 African currencies outside the CFA franc zone, found the naira was among the continent's most resilient currencies in the second quarter of 2026, with maximum depreciation of 2.6%, compared with 10% for Ghana's cedi and 5% for Kenya's shilling. By August 2026 the naira had recovered about 1.9% from its second-quarter lows.

The World Bank attributed that relative stability to improved foreign exchange liquidity, higher oil production and continued CBN intervention in the official market, with external reserves above $55 billion providing a buffer many other African countries lacked. It also noted that the naira's stability coexists with structural issues, including low tax revenue, high unemployment and infrastructure deficits, that the currency's performance alone cannot resolve.

For businesses, the forward market matters because these contracts allow buyers and sellers to lock in an exchange rate for a future transaction, helping them manage uncertainty over the naira cost of payments due later. In its weekly economic and market report for the week ended October 9, Cordros Securities said the near-term outlook for foreign exchange inflows would depend on the resilience of foreign portfolio participation and a recovery in domestic sources of dollar supply.