Activity in Nigeria’s foreign-exchange market slowed sharply last week as total turnover fell 30.23 per cent to $2.37 billion, reflecting weaker transactions across both the spot and derivatives segments of the market.
Data released by FMDQ Group showed total FX turnover between authorised dealers and their clients stood at $2.366 billion for the week ended September 18, 2026, compared with $3.392 billion in the preceding week.
That represents a decline of approximately $1.025 billion in just one week.
The sharpest contraction occurred in derivatives trading, while spot-market activity also declined.
The development provides another indicator of conditions in Nigeria’s evolving foreign-exchange market at a time when policymakers are trying to deepen liquidity, strengthen price discovery and sustain confidence in the naira.
Derivatives Turnover Crashes Nearly 94%
FMDQ Group Chief Operating Officer Tumi Sekoni said the week-on-week decline was jointly driven by a 21.06 per cent reduction in FX spot transactions and a 93.74 per cent fall in derivatives transactions.
Derivatives turnover consequently collapsed from $427.99 million to just $26.78 million.
All the derivatives activity recorded during the week came from FX forwards.
The spot market remained significantly larger, but activity there also weakened.
Spot turnover dropped from $2.964 billion in the previous week to $2.340 billion, representing a decline of approximately 21 per cent.
Spot transactions consequently accounted for 98.87 per cent of total FX turnover, leaving derivatives with just 1.13 per cent.
Daily Trading Falls Below $500m
Average daily turnover also declined substantially.
The FX market recorded average daily transactions of approximately $473.26 million, down from $678.33 million during the previous week.
For businesses, the depth of the FX market matters because companies importing machinery, raw materials and other inputs require access to foreign currency.
Exporters and international investors similarly need a functioning market through which foreign-exchange positions can be converted efficiently.
A single week’s reduction does not by itself establish a lasting deterioration in liquidity, particularly because trading volumes can fluctuate significantly.
But persistent declines would be more important because market depth is one of the factors foreign investors consider when determining whether they can move capital into and out of an economy efficiently.
Nigeria Rebuilding Foreign Investor Confidence
The figures arrive during an important period for Nigeria’s financial markets.
J.P. Morgan recently added eligible Nigerian local-currency government bonds to its emerging-market index universe, while FTSE Russell’s reclassification of Nigeria from Unclassified to Frontier Market status takes effect from the opening of trading on September 21.
Both developments have increased attention on Nigeria among international portfolio investors.
Foreign investors, however, look beyond potential investment returns.
They also consider whether sufficient FX liquidity exists to enter and exit positions without major disruption.
Nigeria’s experience over the past decade has demonstrated how critical that issue can become.
The latest FMDQ figures will therefore be watched alongside the exchange rate, foreign reserves and foreign capital flows to determine whether the fall represents temporary trading volatility or the beginning of a broader slowdown.
For businesses, meanwhile, the key issue remains straightforward: a deeper and more predictable foreign-exchange market reduces uncertainty when companies plan imports, investment and international transactions.
