FX Spot Trades Lift Nigeria’s Weekly Foreign Exchange Turnover to $2.39bn

By Benson Daniel

Nigeria’s foreign exchange market recorded a sharp increase in trading activity, with total weekly turnover rising by 46 per cent to $2.39 billion, driven largely by a surge in FX spot transactions.

The latest market data showed that the significant increase in trading volume reflects improved liquidity and stronger participation by banks, foreign investors and other authorised market participants in the Nigerian foreign exchange market.

Analysts said the rise in spot transactions indicates growing confidence in the country’s FX market reforms, as market participants increasingly engage in immediate currency exchanges to meet trade, investment and operational needs.

Spot transactions, which involve the immediate exchange of currencies at prevailing market rates, accounted for the largest share of total turnover during the review period. The strong performance highlights the increasing preference for transparent and market driven foreign exchange trading.

Market experts noted that improved foreign exchange liquidity has helped ease pressure on businesses requiring access to foreign currencies for imports, debt servicing and other international obligations. They added that the Central Bank of Nigeria’s ongoing reforms aimed at enhancing price discovery and deepening the foreign exchange market are beginning to yield positive results.

Despite the encouraging growth in market turnover, analysts cautioned that sustaining liquidity will depend on continued policy consistency, increased foreign exchange inflows and improved investor confidence. They stressed that maintaining macroeconomic stability remains essential to supporting exchange rate stability and attracting long term foreign investment.

The experts also observed that stronger participation in the FX market could improve confidence among international investors considering opportunities in Nigeria, particularly as the country continues implementing reforms to strengthen its financial system and expand economic growth.

They maintained that while recent gains are encouraging, authorities must continue implementing measures that enhance market transparency, improve foreign exchange supply and support productive sectors of the economy to ensure long term stability in the country’s foreign exchange market.