Nigeria’s foreign exchange market experienced a significant slowdown during the week ended July 10, 2026, with total turnover across the FX Spot and Derivatives segments declining by 46.57% to $1.631 billion from $3.053 billion recorded in the previous week.
The decline represents a reduction of approximately $1.42 billion in weekly transaction value and marks the steepest week-on-week contraction in foreign exchange market activity recorded so far in 2026. Data released by FMDQ indicates that both spot and derivative transactions weakened simultaneously after several weeks of elevated trading activity.
Average daily turnover also dropped substantially, falling to $326.22 million from $610.60 million in the preceding week. This suggests a notable moderation in demand from banks, corporates, and other market participants across the official foreign exchange market.
A closer review of market activity shows that the FX Spot segment accounted for most of the decline. Spot transactions fell by 46.62% to $1.580 billion, compared with $2.960 billion recorded a week earlier. Daily average spot turnover similarly declined from $591.91 million to $315.98 million.
Despite the reduction in transaction volumes, the spot market remained the dominant segment, contributing 96.86% of total market turnover, broadly unchanged from the previous week’s share of 96.94%.
Activity in the FX Forwards market also weakened during the period. Turnover declined by 45.19% to $51.22 million from $93.45 million, while average daily transactions fell from $18.69 million to $10.24 million. However, the proportion of derivatives trading within total market activity remained relatively stable, indicating that market participants continued to utilize hedging instruments despite lower overall trading volumes.
Market analysts view the latest decline as a moderation from unusually strong activity levels recorded in the first week of July rather than evidence of deteriorating market liquidity. The previous week’s turnover of over $3 billion represented one of the strongest performances seen in several months, making a subsequent pullback unsurprising.
The slowdown has been attributed to reduced demand for import-related foreign exchange transactions, lower interbank trading activity, and a typical easing in corporate FX requirements following heightened activity at the start of a new quarter.
Although turnover declined sharply compared to the previous week, overall transaction levels remain broadly consistent with volumes recorded in late June, suggesting that underlying demand conditions remain relatively stable.
Recent market trends illustrate the volatility in Nigeria’s foreign exchange market. Turnover increased to $2.32 billion during the week ended June 19 before rising further to $2.84 billion in the week ended June 26. Activity then accelerated to $3.05 billion in the week ended July 3, driven primarily by a surge in spot market transactions.
Against this backdrop, the latest decline appears to represent a return toward more normal trading levels rather than a fundamental weakening of market participation.
The FMDQ turnover data remains a key indicator of liquidity conditions within Nigeria’s official foreign exchange market, capturing transactions executed by authorized dealers, financial institutions, and their clients under the country’s market-driven exchange rate framework introduced in 2023.
