Nigeria’s FX market hits record $4.4 billion, mystery deals fuel speculation

Nigeria’s foreign exchange market crossed the $4 billion mark in weekly turnover for the first time in 2026, with total transactions in the FX Spot and Derivatives markets surging 83.38% to $4.375 billion in the week ended July 24, 2026, up from $2.386 billion in the previous week.

This is according to the latest weekly FX market turnover report which Nairametrics obtained from FMDQ Exchange.

The milestone comes just three weeks after the market posted what was then described as its strongest weekly turnover in about three months, at $3.053 billion for the week ended July 3, 2026.

Analysts say it may have been driven by large private-sector transactions and increased foreign portfolio inflows.

But an insider at Financial Market Dealers Association (FMDA) who didn’t want to be mentioned specifically linked the unprecedented weekly surge in dollar turnover to Dangote Refinery’s policy of selling petroleum products in dollars but which was later reversed.

What the data is saying:

There were remarkable increases across segments during the week under review with FX Spot and Derivatives jumping by unprecedented margins.

• Total FX turnover: $4.375 billion, up 83.38% ($1.989 billion) from $2.385 billion the previous week.
• Average daily turnover: $875.00 million, up from $477.16 million, an increase of $397.84 million.
• FX Spot transactions: $4.312 billion, up 81.85% ($1.940 billion) from $2.371 billion.
• FX Derivatives (entirely FX Forwards): $62.87 million, up 333.59% ($48.37 million) from $14.50 million.
• Spot market share: 98.56% of total turnover, down slightly from 99.39% the previous week.
• Forwards’ share of total turnover: 1.44%, up from 0.61%.

More insights:

The scale of the increase — a $1.99 billion week-on-week increase — dwarfs anything recorded so far this year. Prior weekly turnover figures through H1 and into July had moved in a comparatively narrow band:

• $2.157 billion in mid-June
• $2.323 billion the following week
• $2.835 billion by June 26.
• $3.053 billion by July 3 before dipping to $1.631 billion.
• It rebounded to $2.386 billion in the weeks that followed.

The week ended July 24 is the first to breach the $4 billion threshold. “You know there was temporary dollar pricing for Dangote Refinery products. This is the reason for the sharp rise in dollar turnover,” said the FX market dealer on condition of anonymity.

What this means for the market:

Nairametrics notes that weekly turnover had been climbing steadily through Q3, from roughly $2.1 billion in mid-June to $3.05 billion by early July, but the leap to $4.38 billion represents a much larger step-change than the market’s recent trajectory.

The Chief Executive Officer of Wyoming Capital Partners Limited, Mr. Tajudeen Olayinka, added more insights:

• “I want to believe there must have been a special transaction. I cannot say categorically what led to that,” Olayinka noted, stressing that the exceptional turnover was likely influenced by some specific large transactions.
• “Some of these investors are actually foreign portfolio investors. The fact that interest rates remain high means they continue to benefit from what Nigeria is able to offer, so they keep coming.”
• “Most likely, anything that passed through FMDQ Securities Exchange came from private sources, not government sources. I’m suspecting there must have been some kind of special transaction, a concentration of large one-off transactions settling.”
• He noted that the 333.59% surge in forward contracts alongside Spot demand is a sign that the investors could have locked in future exchange rates to manage FX risk.
• He maintained that the combination of unusually high spot turnover and stronger forward activity points to investors simultaneously executing trades and hedging future currency risks.
• According to him, investors often use forward contracts to hedge future foreign exchange exposure after bringing funds into the country.
• “There may be a link. If somebody is selling in the spot market, they may also be buying forwards so they can hedge and be certain of the rate at which they will repatriate their money.”
• “That’s why I’m suspecting a link. It might have been a special transaction,” he added.
• The sharp swings weekly FX turnover — from $2.836 billion, to $1.631 billion, to $2.386 billion, and now $4.375 billion, raise questions about the factors behind the latest spike.

Given the timing, it is plausible that Dangote Refinery’s temporary decision to price petroleum products in U.S. dollars, which lasted for about a week before being reversed, contributed to the surge by boosting demand for foreign exchange and encouraging increased hedging activity.

What you should know:

The week’s record FX turnover coincided with a brief policy shift by Dangote Petroleum Refinery, which announced on 14 July 2026 that it would begin pricing petrol, diesel and aviation fuel in U.S. dollars, replacing its naira-denominated pricing framework.

• The move was widely seen as likely to increase demand for dollars from domestic fuel marketers while encouraging greater FX hedging activity.
• However, the dollar-pricing policy lasted for about a week before the refinery withdrew it and resumed naira-denominated sales, easing concerns over sustained pressure on foreign exchange demand.
• The brief switch nevertheless coincided with a sharp jump in official FX market turnover, prompting speculation that it may have contributed to the surge in spot and forward transactions.
• Beyond the refinery’s pricing decision, the Nigerian Foreign Exchange Market (NFEM) has continued to deepen, recording more than $46 billion in cumulative turnover between March and June 2026.
• Spot transactions have consistently accounted for more than 98% of weekly turnover, while exchange-traded FX futures remained inactive, leaving over-the-counter forward contracts as the primary hedging instrument in the market.

The July 24 figure eclipses the previous 2026 high of $3.053 billion recorded in the week ended July 3, which itself had been described as the market’s strongest weekly showing in three months. It also follows a volatile stretch in which turnover fell to $1.631 billion before rebounding 46.27% to $2.386 billion the following week.