Nigeria’s foreign exchange market experienced a substantial boost in liquidity during the first half of 2026, with daily turnover frequently surpassing $500 million. Several trading sessions crossed the $900 million mark, culminating in a record $1.82 billion changing hands on May 12, 2026.

This surge in trading activity signifies a deeper and more liquid official foreign exchange market, enhancing price discovery and enabling the naira to manage demand pressures more effectively, despite occasional volatility.

Data from the Central Bank of Nigeria (CBN) indicates the naira strengthened from N1,431/$ at the beginning of the year to N1,376/$ by June 30, representing a gain of N55, or 3.8%, over the six-month period.

Market Liquidity and Turnover Details

Market analysts highlight the sharp rise in official FX turnover as a more crucial development than the currency’s appreciation. This reflects growing confidence in Nigeria’s foreign exchange market following reforms introduced by the CBN nearly three years prior.

Available NFEM data reveals that more than $31 billion worth of foreign exchange was traded in the official market between March and June 2026, underscoring a substantial improvement in market depth. Unlike previous periods reliant on periodic interventions, turnover remained consistently strong throughout the second quarter, with daily trading frequently ranging between $500 million and $1 billion.

Some of the busiest trading sessions during this period included:

• May 12: $1.82 billion (highest daily turnover on record under the NFEM framework)
• March 10: $1.14 billion
• March 13: $1.13 billion
• June 30: $1.07 billion
• June 15: $985.6 million
• March 23: $984.1 million
• April 8: $966.4 million
• June 25: $923.6 million
• June 29: $910.8 million

Analysts note that the sustained increase in turnover, rather than isolated spikes, indicates broader participation by buyers and sellers, which helps reduce pricing distortions and improves overall market efficiency.

H1 2026 Liquidity Progression

Trading activity gained momentum as the year progressed. While complete turnover data for January and February was unavailable, activity accelerated sharply from March as confidence returned to the official market.

March recorded three trading sessions with turnover exceeding $980 million. April maintained strong liquidity, with transactions reaching $966.4 million on April 8 and $802.4 million on April 29.

May emerged as the busiest month of the first half, recording the record $1.82 billion traded on May 12. June sustained this momentum, producing four trading sessions above $900 million, suggesting that improved liquidity had become increasingly structural rather than event-driven.

The interbank foreign exchange market also deepened, with daily turnover generally ranging between $70 million and $250 million. A strong session occurred on April 29, when interbank transactions approached $250 million, and several June sessions exceeded $170 million.

Trading activity also broadened considerably, with several sessions recording more than 350 individual transactions. April 8 notably posted 515 deals, reflecting wider market participation and reducing the influence of large individual trades on exchange-rate movements.

Liquidity and Naira Stability

The improvement in liquidity coincided with a moderation in exchange-rate volatility. After strengthening from N1,431/$ in early January to around N1,340/$ in February before a brief weakening in March, the naira traded within a relatively narrower band of roughly N1,356/$ to N1,389/$ during most of the second quarter.

Analysts attribute this stability to deeper liquidity, which enabled the market to absorb temporary demand pressures without triggering the sharp price swings seen in earlier periods.

Expert Insights

Mallam Muftau Yusuf, an analyst at Kwik Securities Ltd, stated that stronger turnover reflects a broader supply base rather than reliance on CBN interventions. He noted, “The improvement in FX liquidity reflects a broader supply base rather than heavy reliance on CBN interventions. Higher yields on Nigerian fixed-income securities have continued to attract foreign portfolio investors, while stronger inflows from oil and gas exporters, non-oil exporters, international oil companies repatriating export proceeds, diaspora remittances and increased intermediation by commercial banks have all contributed to improving liquidity.”

Yusuf emphasized that sustaining these inflows would be critical for maintaining exchange-rate stability in the second half of the year. He added that the first-half performance suggests the CBN’s foreign exchange reforms are improving market efficiency, stating, “The first-half performance of the naira suggests the foreign exchange market is becoming more liquid and increasingly driven by market forces. The improvement in turnover indicates that confidence is gradually returning to the official market.”

However, improved liquidity has occurred despite weak foreign direct investment. According to National Bureau of Statistics data, FDI declined to $135.08 million in the first quarter of 2026 from $357.80 million in the previous quarter.

Forex analyst Maruf Babafemi cautioned that turnover alone cannot guarantee a stronger naira, noting that oil production, capital inflows, and external reserves will ultimately determine the currency’s direction.

Economist Dr. Femi Ojelabi described the increase in turnover as one of the clearest signs that confidence is returning to Nigeria’s official FX market. He remarked, “Deeper liquidity enhances price discovery, reduces opportunities for speculation and makes the market more resilient.”

Additional Context

Nairametrics previously reported that the naira closed June at N1,376/$, ending the month slightly weaker despite significant intra-month volatility. Nigeria’s external reserves recently climbed above $51 billion, reaching their highest level since 2009. External reserves increased by more than $1 billion during the first half of June, supported by stronger foreign exchange inflows.

Analysts conclude that stronger FX liquidity, rising turnover, and broader market participation suggest Nigeria’s official foreign exchange market is becoming deeper, more transparent, and increasingly resilient as reforms mature.