Nigeria's FX market hits record $1.82B daily turnover as naira gains 3.8% in H1 2026
Nigeria's foreign exchange market saw daily turnover regularly exceed $500 million in H1 2026, with a record $1.82 billion traded on May 12—the highest single-day volume under the NFEM framework. The naira appreciated from N1,431/$ to N1,376/$ between January and June 30, a 3.8% gain, while external reserves rose above $51 billion—their highest level since 2009. Analysts attribute this liquidity surge to renewed confidence in CBN's FX reforms, citing stronger inflows from oil/gas exporters, diaspora remittances, and foreign portfolio investments attracted by higher Nigerian bond yields.
This matters for Nigerians because deeper FX liquidity means more stable exchange rates for importers, manufacturers, and anyone needing foreign currency for school fees, medical trips, or imports. The improved market depth reduces sharp naira swings that previously disrupted business planning and household budgets. However, foreign direct investment fell to $135 million in Q1 2026 from $358 million the previous quarter, suggesting FX stability currently relies more on portfolio flows and commodity exports than long-term industrial investment.
With reserves now over $51 billion and consistent daily trading between $500 million-$1 billion, the CBN appears better equipped to manage demand pressures without frequent interventions. For importers and businesses, this could mean more predictable forex access at bureau de change or banks. For individuals holding foreign currency, the naira's gradual strength may slow the pace of depreciation seen in previous years.
Given that FDI remains weak despite FX market improvements, should policymakers focus more on attracting long-term industrial investment rather than relying on volatile portfolio flows and commodity exports to sustain naira stability?