Nigeria’s foreign exchange utilisation climbed to $18.34 billion in the second quarter of 2026, its highest quarterly level since the third quarter of 2011, as financial services accounted for more than half of total dollar demand.
Financial services absorbed $9.64 billion, representing 52.58 per cent of total foreign exchange utilisation during the quarter, according to the Financial Markets Dealers Association’s (FMDA) Q2 2026 FX Market Update, which draws on Central Bank of Nigeria data.
The figures highlight the growing importance of financial and cross-border service transactions in Nigeria’s foreign exchange market, even as demand for some categories of imported goods declined.
Total foreign exchange utilisation rose by 12.84 per cent from approximately $16.25 billion in the first quarter of 2026. Compared with the $12.03 billion recorded in the corresponding quarter of 2025, demand increased by 52.42 per cent.
Financial transactions dominate dollar demand
Invisible transactions — payments for services and financial activities rather than merchandise imports — accounted for $13.24 billion, or 72.19 per cent of total foreign exchange utilisation in the second quarter.
The amount represented a 93.16 per cent increase from $6.85 billion in the corresponding period of 2025.
Within the category, financial services demand rose by 72.81 per cent to $9.64 billion from $5.58 billion, an increase of approximately $4.06 billion.
Business services utilisation recorded an even sharper percentage increase, rising by 191.39 per cent to $1.66 billion from $570.41 million. Demand for other services climbed by 118.66 per cent to $1.12 billion.
The report, however, did not provide a detailed breakdown of the financial services transactions. The figures therefore cannot be attributed solely to foreign investment repatriation, capital flight or any single category of payment.
Import-related demand presents a mixed picture
While demand for financial services expanded sharply, import-related foreign exchange utilisation declined by 1.49 per cent to $5.10 billion.
Industrial imports fell by 22.67 per cent to $1.86 billion, while oil imports declined by 9.75 per cent to $1.25 billion.
In contrast, foreign exchange utilisation for manufactured products increased by 77.73 per cent to $982.09 million.
The divergent movements indicate that the increase in overall foreign exchange demand was driven primarily by services and financial transactions rather than a uniform rise across merchandise imports.
Autonomous inflows take a larger share
On the supply side, autonomous foreign exchange inflows — funds entering the market through sources outside direct CBN sales — rose to $23.31 billion, accounting for 74.15 per cent of total foreign exchange inflows.
The share was the highest in 13 years, compared with 68.48 per cent in the first quarter of 2026 and 63.64 per cent in the second quarter of 2025.
Meanwhile, the CBN’s foreign exchange sales fell by 66.73 per cent to $418.08 million from $1.26 billion in the first quarter. Total foreign exchange inflows stood at $31.43 billion, down 2.96 per cent quarter-on-quarter but up 14.04 per cent year-on-year.
Net foreign exchange flows reached $22.50 billion, their highest level since the fourth quarter of 2019, while first-half net flows rose by 47.24 per cent year-on-year to $43.84 billion.
The figures suggest that autonomous sources have become increasingly important in meeting Nigeria’s foreign exchange needs as direct CBN sales have declined.
However, the reported net flows should not be confused with an equivalent increase in external reserves, as the two measures capture different aspects of foreign exchange transactions.
The latest data underscore the need to monitor not only the volume of foreign exchange entering the market but also the composition of demand, particularly the growing weight of financial and service-related payments.
