Foreign exchange turnover on Nigeria’s official market fell sharply to $185 million on August 11, 2026, the lowest level in 11 weeks, as trading activity and the number of transactions declined significantly.
Data from the Central Bank of Nigeria (CBN) showed that Tuesday’s turnover was the lowest since May 25, when transactions stood at $175.34 million.
The decline came as the naira weakened slightly to N1,365 per dollar, compared with N1,361.50/$ on Monday.
Market activity also thinned considerably, with the number of deals falling to 186 from 348 a day earlier. Interbank transactions dropped from 182 to just 47.
The naira traded between N1,361 and N1,365.50/$, with a weighted average rate of N1,364.8992.
The latest figures highlight the sharp swings in activity on the Nigerian Foreign Exchange Market (NFEM). Turnover had surged to about $1.25 billion on August 7, before declining to $878.55 million on August 6 and $460.14 million on August 5.
The market also recorded significant fluctuations in July, with daily turnover reaching $1.53 billion on July 21 and $1.16 billion on July 22, before falling to $231.4 million by July 31.
The drop in FX market activity occurred despite continued accumulation of Nigeria’s external reserves.
CBN data showed that reserves increased by about $198 million in the first eight days of August, rising from $51.943 billion on August 3 to $52.141 billion on August 10.
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However, the pace of accumulation was slower than at the beginning of July, when reserves rose by approximately $244 million during the first six trading sessions.
The combination of stronger reserves and weaker FX turnover suggests that recent improvements in Nigeria’s external liquidity position have not translated into consistently high transaction volumes in the official FX market.
Global currency and commodity markets have also remained sensitive to developments around US inflation, interest-rate expectations and renewed geopolitical tensions in the Middle East.
The dollar index rose 0.1 per cent to 99.89 in Asian trading, while Brent crude gained 0.9 per cent to $89.69 a barrel amid renewed concerns over shipping disruptions in the region.
The yen weakened 0.1 per cent to 159.44 per dollar, while the euro fell 0.1 per cent to $1.1534. The pound remained at $1.3505, while the Australian dollar slipped 0.1 per cent to $0.7056.
Developments in global oil and currency markets remain important for Nigeria because crude oil receipts are a major source of foreign exchange inflows.
Liquidity management weighs on market conditions
The subdued FX activity also comes against the backdrop of aggressive liquidity management by the CBN.
The apex bank has withdrawn more than N11.8 trillion through combined Open Market Operations and Treasury Bills auctions in July and early August as it seeks to manage excess liquidity and maintain its tight monetary policy stance.
At its 306th Monetary Policy Committee meeting held on July 20 and 21, the CBN retained the Monetary Policy Rate at 26.5 per cent.
The market had recorded a strong $3.73 billion in NFEM turnover in the week ended August 7, representing a 117 per cent increase from the previous week.
Tuesday’s sharp reversal therefore underscores the volatile nature of Nigeria’s FX market, with investors and dealers closely monitoring liquidity conditions, reserve accumulation, global oil prices and the CBN’s monetary policy direction for signals on the naira’s next move.