U.S. Dollar Inflow into Nigeria’s FX Market Drops by 21%
Total U.S. dollar volume flows into the Nigeria Foreign Exchange Market (NFEM) declined by 20.67% week on week to US$593.70 million from US$748.40 million in the prior week, Coronation Merchant Bank’s research subsidiary said in a report.
According to the report, the slowdown reflects softer market activity at the start of the year, as well as reduced participation from offshore investors.
Coronation Research said local sources remained the dominant contributors, accounting for 82.95% of the total FX inflow recorded last week in the official market.
The breakdown showed that the local sources’ contribution was led by individuals with US$165.1 million, followed by the CBN with US$128.00 million, and exporters/importers supplied US$115.6 million.
On the external front, foreign portfolio investors’ inflow slowed further, contributing just 17.05% of the total FX inflow, according to Coronation. Notably, both foreign direct investments (FDIs) and foreign portfolio investments (FPIs) weakened sharply on a weekly basis.
FPIs declined by 72.91% week on week to US$46 million, from US$169.8 million in the previous week, while FDIs fell 81.87% to US$7.00 million from US$38.60 million previously.
The naira began the year with a mixed performance across FX markets. At the official window, the currency strengthened marginally against the US Dollar, closing at N1,430.85/US$, representing 0.88% weekly appreciation.
This improvement was largely supported by sustained CBN supply into the foreign exchange market. In contrast, the parallel market rate weakened to N1,490, reflecting persistent FX demand pressures outside the official window.
Meanwhile, the CBN’s gross foreign exchange reserves rose slightly by 0.58% to US$45.50 billion, adding US$264.56 millio at the start of the year.
In the near term, the naira is expected to trade within a relatively stable range at the official window, supported by CBN intervention and seasonal easing in FX demand following year-end pressures. NGX to Create Wealth in 2026, Traded in Overbought Region—Report
