Nigeria’s foreign exchange market has recorded its busiest week of 2026, with total turnover jumping 146.12 per cent to about 5.05 billion dollars in the week ended 21 August 2026, a level that points to steadily improving dollar liquidity in the official window and growing confidence in the naira.
Data from FMDQ Securities Exchange showed that turnover rose by roughly 3 billion dollars from the 2.05 billion dollars traded in the preceding week ended 14 August. At an average rate of about 1,346.50 naira to the dollar during the period, the transactions were worth approximately 6.81 trillion naira. The figure surpassed the previous high for the year of 4.375 billion dollars, set in the week ended 24 July, and marked the strongest single week since the market reforms of 2023 began reshaping how foreign currency is traded in Nigeria.
The surge was driven almost entirely by the spot market, where investors and banks buy and sell dollars for immediate delivery. Spot transactions climbed 155.02 per cent to 5.01 billion dollars from 1.96 billion dollars a week earlier, lifting the segment’s share of total turnover to 99.03 per cent from 95.58 per cent. Average daily spot volume rose to about 1 billion dollars, while average daily turnover across all segments expanded to 1.01 billion dollars from 461.4 million dollars the previous week.
Activity in the derivatives market moved in the opposite direction. Turnover for foreign exchange derivatives, which allow firms to hedge against future currency swings, fell 46.09 per cent to 49 million dollars from 90.89 million dollars, with the decline concentrated in FX Forwards. The segment’s share of the market shrank to 0.97 per cent from 4.42 per cent. Analysts link the pull back to strong immediate liquidity in the spot window, which reduces the need for participants to lock in forward contracts as protection.
The liquidity build up has coincided with a period of relative stability in the official market. According to Central Bank of Nigeria data, the naira strengthened to 1,346.90 naira to the dollar at the Nigerian Foreign Exchange Market on 21 August, gaining about 11 naira, or 0.84 per cent, from 1,358.25 naira the week before.
Underpinning that stability is a stronger reserve position. Nigeria’s external reserves, the buffer the apex bank draws on to defend the currency and meet external obligations, crossed 52.5 billion dollars in August, their highest level in about 17 years. The reserves stood at 52.65 billion dollars as of 19 August, up sharply from around 41 billion dollars in the same period of 2025. The build up has been supported by firmer crude oil earnings, sustained foreign portfolio inflows and improved confidence in the reform programme.
Market participants have also credited greater transparency for the improved activity. The introduction of the CBN’s Electronic Foreign Exchange Matching System, which centralises and displays trades in real time, alongside a tight monetary policy stance aimed at curbing inflation and stabilising the exchange rate, has narrowed the gap between the official and parallel markets and drawn more transactions into the formal system.
The weekly spike is best understood against the two years of currency reform that preceded it. When the government floated the naira and unified the various exchange rate windows in June 2023, the currency fell steeply and dollar liquidity in the official market dried up. The turnaround since then has been gradual rather than sudden.
Presenting a reforms scorecard in August, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the official exchange rate had moved from about 460 naira to the dollar in May 2023 to around 1,358 naira in August 2026, while the premium between the official and parallel markets had fallen from more than 60 per cent to less than 5 per cent. He argued that without the reforms, the official rate could have traded between 550 and 800 naira to the dollar, with the currency largely unavailable at any price.
The FMDQ figures reflect that shift over the longer term. The exchange reported turnover of 426.51 trillion naira across its markets in the first seven months of 2026, driven by foreign exchange and short term liquidity instruments. That compares with 676.71 trillion naira for the whole of 2025, suggesting that 2026 activity is running well ahead of the previous year.
Analysts have urged care in reading too much into a single headline figure. The Head of Research at GTI Securities Limited, Abiodun Ogunniyi, noted that the 5 billion dollar level represents the gross value of trades processed through FMDQ rather than fresh capital entering the country. “The 5.06 billion dollar figure represents the gross value of transactions reported through FMDQ,” he said, pointing out that the same dollars can change hands several times between banks, clients and the central bank within a single week.
Others have flagged the policy dilemma that heavy inflows can create. Where local demand does not fully absorb the dollars coming in, the CBN may need to intervene to prevent an appreciation not supported by real productivity, while a sustained easing of exchange rate pressure would ideally be matched by lower interest rates to avoid distorting the wider economy.
For now, the weekly turnover record signals a market that is deeper and more liquid than at any point since the reforms began, with a firmer naira and record reserves to match. Whether that momentum holds will depend on the durability of oil earnings, the steadiness of portfolio inflows and the central bank’s ability to keep the official and parallel markets aligned. The figures confirm progress, but they measure the flow of transactions, not yet the arrival of the long term investment the reforms were designed to attract.