Nigeria’s foreign exchange market recorded a significant improvement in liquidity during the first half of 2026, with daily trading volumes edging closer to an average of $1 billion, reinforcing expectations of greater stability for the naira.
Market data from the Central Bank of Nigeria (CBN) showed that official foreign exchange turnover consistently exceeded $500 million on many trading days, while several sessions surpassed the $900 million mark. The highest daily turnover reached a record $1.82 billion under the Nigerian Foreign Exchange Market (NFEM) framework.
The stronger market liquidity coincided with an appreciation of the naira, which gained about 3.8 per cent during the first six months of the year. The local currency strengthened from N1,431 to the dollar at the beginning of January to N1,376 by June 30.
Financial analysts believe the sustained increase in trading activity reflects growing confidence in Nigeria’s foreign exchange market following reforms introduced by the CBN over the past three years. They argue that a deeper and more liquid market improves price discovery, enables the naira to absorb demand pressures more effectively, and reduces exchange rate distortions.
Available NFEM figures indicate that more than $31 billion worth of foreign exchange transactions were conducted between March and June 2026, highlighting increased market depth. During the period, daily turnover frequently ranged between $500 million and $1 billion.
Among the busiest trading sessions were May 12, when turnover reached a record $1.82 billion, March 10 and March 13, with more than $1.1 billion each, and June 30, which recorded over $1.07 billion in transactions.
Market observers noted that liquidity strengthened steadily throughout the first half of the year. March witnessed three trading sessions above $980 million, while May emerged as the busiest month. June maintained the momentum with four trading days exceeding $900 million, suggesting that the improvement in liquidity has become more structural than temporary.
The interbank foreign exchange market also recorded stronger activity, with daily transactions generally ranging between $70 million and $250 million. Broader market participation was evident as some trading sessions recorded more than 350 individual deals, with April 8 posting as many as 515 transactions.
Analysts said the improved liquidity has helped moderate exchange rate volatility. After strengthening early in the year, the naira traded within a relatively narrower range during most of the second quarter, reflecting the market’s increased capacity to absorb temporary demand shocks.
According to market analysts, the stronger turnover is being driven by a wider supply of foreign exchange rather than reliance on CBN interventions. They attributed the trend to increased inflows from foreign portfolio investors attracted by higher yields on Nigerian fixed-income securities, alongside stronger receipts from oil exporters, non-oil exporters, diaspora remittances and improved intermediation by commercial banks.
Experts, however, cautioned that while higher turnover enhances market efficiency and confidence, maintaining exchange rate stability in the second half of the year will depend on sustained capital inflows, stronger oil production and healthy external reserves.
