Market News

• $51.46b reserves positive for local currency

The foreign exchange (forex) market witnessed a significant growth in liquidity in the first half of the year, with daily turnover regularly racing towards $1 billion.

Data from the Central Bank of Nigeria (CBN) website showed daily turnover crossing the $900 million mark, with nearly $1.82 billion daily transaction value recorded on May 12.

Available Nigeria Foreign Exchange Market (NFEM) data show 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 when liquidity depended largely on periodic interventions, turnover remained consistently strong throughout the second quarter, with daily trading frequently ranging between $500 million and $1 billion.

Transactions within the period showed that on May 12, $1.82 billion (highest daily turnover on record under the NFEM framework) was achieved, followed March 10, $1.14 billion; March 13, $1.13 billion and June 30, $1.07 billion were recorded.

Also on June 15, $985.6 million was recorded, folowed by March 23, $984.1 million; April 8, $966.4 million; June 25, $923.6 million and June 29, $910.8 million.

Market analysts note that the sustained increase in turnover is more significant than isolated spikes because it indicates broader participation by buyers and sellers, reducing pricing distortions and improving overall market efficiency.

Market analysis showed that March recorded three trading sessions with turnover above $980 million, while 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 after recording the record $1.82 billion traded on May 12.

Likewise, June sustained the momentum, producing four trading sessions above $900 million, suggesting that improved liquidity had become increasingly structural rather than event-driven.

According to reports, the interbank FX market also deepened during the period, with daily turnover generally ranging between $70 million and $250 million. One of the strongest sessions occurred on April 29, when interbank transactions approached $250 million, while several June sessions exceeded $170 million.

It further showed that several sessions recorded more than 350 individual transactions, while April 8 posted 515 deals, reflecting wider market participation and reducing the influence of large individual trades on exchange-rate movements.

Meanwhile, the Central Bank of Nigeria’s data showed that the naira closed on Friday at N1,370.19 to dollar, down from N1,370.15 traded the previous day.

At the parallel market, the Naira closed at N1,405 per dollar, despite external reserves hitting $51.46 billion on June 30th.

Data published on the apex bank’s website showed that reserves increased to $49.80 billion as of June 1, 2026, from $48.32 billion recorded on May 7. The gross external reserves have further climbed to a record $50.04 billion, reinforcing investor confidence and boosting the CBN’s capacity to support the local currency.

In emailed note to investors, Managing Director, Financial Derivatives Company Limited, Bismark Rewane, said while lower oil prices and a production average of 1.5mbpd mean softer revenue for the Nigerian government, a risk to the naira’s sustained stability around N1,405/$, and a rising fiscal deficit, estimated at 4.4 per cent of Gross Domestic Product, it is good news for consumers and small business owners.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the FX trading activity surge represents improved  liquidity in the  official foreign exchange market, strengthening price discovery and markt confidence.

He said at $51.46 billion, the external reserves position represents a strong prospects for naira and support for the domestic economy.