NEWS
Nigeria’s FX Demand Hits $18.34bn, Services Account for 72 Percent
Nigeria’s FX Demand Hits $18.34bn, Services Account for 72 Percent
Nigeria’s foreign exchange utilisation rose 52.42 percent year-on-year to $18.34bn in Q2 2026, the highest level in nearly 15 years.
Invisible transactions accounted for $13.24bn, or 72.19 percent of total utilisation, driven by rising demand for financial and business services.
Central Bank of Nigeria direct FX sales fell 86.79 percent year-on-year to $418.08m, as autonomous inflows continued to dominate supply.
October 16, () – Nigeria’s foreign exchange utilisation climbed to $18.34bn in the second quarter of 2026, its highest level in nearly 15 years, as demand for services and financial transactions accounted for the bulk of spending in the market.
The Financial Markets Dealers Association’s second-quarter foreign exchange market report, based on Central Bank of Nigeria data, showed that utilisation increased by 12.84 percent from $16.25bn in the first quarter and 52.42 percent from $12.03bn in the corresponding period of 2025.
Financial services alone accounted for $9.64bn, representing 52.58 percent of total utilisation.
The figures indicate that demand for foreign exchange was increasingly concentrated in services and cross-border financial transactions, even as spending on some categories of imports declined.
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Invisible transactions, covering services and other non-merchandise payments, totalled $13.24bn, equivalent to 72.19 percent of utilisation. This was a 93.16 percent increase from $6.85bn recorded in the second quarter of 2025.
Financial services drive demand
A representation of financial services Photo credit gettyimages
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Financial services demand rose by 72.81 percent year-on-year, from $5.58bn to $9.64bn. Business services recorded an even sharper increase, climbing by 191.39 per cent to $1.66bn from $570.41m, while other services rose by 118.66 per cent to $1.12bn.
However, the report did not provide a detailed breakdown of financial services transactions. It is therefore unclear how much of the increase came from investment-related payments, financial obligations or other cross-border transactions.
The figures also showed a divergence between services and merchandise-related demand. Import-related foreign exchange utilisation declined by 1.49 percent to $5.10bn during the quarter.
Industrial imports fell by 22.67 percent to $1.86bn, while oil imports declined by 9.75 percent to $1.25bn. In contrast, demand for manufactured products rose by 77.73 percent to $982.09m.
The report also identified $542.56m in unallocated invisible demand, reflecting a discrepancy between the June figures and the reported aggregate. This limits the extent to which the published breakdown can be fully reconciled.
Autonomous inflows dominate supply
On the supply side, autonomous foreign exchange inflows provided $23.31bn, accounting for 74.15 percent of total inflows during the quarter.
The amount was the highest since the first quarter of 2020, underscoring the growing importance of non-CBN sources in meeting market demand.
Total foreign exchange inflows, however, declined by 2.96 percent quarter-on-quarter to $31.43bn, although they remained 14.04 percent above the level recorded in the second quarter of 2025.
CBN-sourced inflows fell by 20.44 percent to $8.12bn. The central bank’s direct foreign exchange sales to the market dropped by 66.73 percent to $418.08m from $1.26bn in the first quarter.
Compared with the $3.17bn recorded in the second quarter of 2025, direct CBN sales declined by 86.79 percent.
The association further reported that the CBN sold $1.67bn in foreign exchange during the first half of 2026, the lowest half-year amount since its records began in 2008.
Despite the quarterly decline in total inflows, Nigeria recorded net foreign exchange flows of $22.50bn in the second quarter, the highest level since the fourth quarter of 2019.
The figures point to a market in which autonomous sources have assumed a larger role in supplying foreign exchange, while demand has become increasingly concentrated in services.
However, the aggregate data alone do not establish whether the surge in financial services payments reflects stronger underlying economic activity, increased external obligations or other transaction-related factors.
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