{"id":10627,"date":"2026-10-05T13:50:15","date_gmt":"2026-10-05T13:50:15","guid":{"rendered":"https:\/\/ograsset.com\/?p=10627"},"modified":"2026-10-05T13:50:19","modified_gmt":"2026-10-05T13:50:19","slug":"fmdq-fx-market-turnover-drops-35-4-to-1-70bn","status":"publish","type":"post","link":"https:\/\/ograsset.com\/index.php\/2026\/10\/05\/fmdq-fx-market-turnover-drops-35-4-to-1-70bn\/","title":{"rendered":"FMDQ FX market turnover drops 35.4% to $1.70bn"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Activity in Nigeria\u2019s foreign exchange market recorded a sharp contraction during the week ended on Friday, 2 October, 2026, as liquidity tightened following a notable surge in trading volume the preceding week.<\/p>\n\n\n\n

The drop reflects ongoing adjustments in FX supply dynamics and seasonal demand fluctuations across the Nigerian Autonomous Foreign Exchange Market, where institutional liquidity often fluctuates in response to central bank interventions, export proceeds, and foreign portfolio inflows.<\/p>\n\n\n\n

Data from the FMDQ FX Market Analysis Report reveals that total FX turnover across the Spot and Derivatives markets fell by 35.41 per cent ($930.18m) to settle at $1.70bn, down from the<\/p>\n\n\n\n

$2.63bn recorded during the week ended 25 September, 2026. The daily average turnover across both market segments contracted to $424.24m compared to $525.43m in the prior week.<\/p>\n\n\n\n

The weekly downturn was primarily driven by the spot market, where transaction value dropped by 36.93 per cent ($955.70m) to $1.63bn, down from $2.59bn in the preceding week. Spot trades, which typically reflect immediate currency needs for trade obligations and corporate remittances, accounted for 96.19 per cent of the total FX turnover, with daily average spot transactions falling from $517.59m to $408.06m.<\/p>\n\n\n\n

Conversely, the FX Derivatives market experienced growth, surging by 65.09 per cent ($25.52m)<\/p>\n\n\n\n

to reach $64.73m, up from $39.21m recorded in the week ended September 25, 2026.<\/p>\n\n\n\n

The derivatives market, composed entirely of FX Forwards turnover, expanded its market share from 1.49 per cent to 3.81 per cent of total market activity, posting a daily average of $16.18m compared to $7.84m in the previous week.<\/p>\n\n\n\n

This uptick in forwards trading highlights growing efforts by market participants to hedge against currency volatility and lock in exchange rates for future obligations amid shifting macroeconomic conditions.<\/p>\n\n\n\n

Source:<\/em> https:\/\/punchng.com\/fmdq-fx-market-turnover-drops-35-4-to-1-70bn\/<\/a><\/em><\/p>\n\n\n\n

CBN\u2019s three-year reforms face real economy test<\/strong><\/p>\n\n\n\n

When Olayemi Cardoso took charge of the Central Bank of Nigeria on September 22, 2023, the institution was confronting overlapping crises.<\/p>\n\n\n\n

Headline inflation stood at 26.72 per cent, the Monetary Policy Rate was 18.75 per cent, and gross external reserves were about $33.2bn. The official exchange rate was around N770 to the dollar, but limited liquidity meant many businesses could not obtain foreign currency at that price.<\/p>\n\n\n\n

The bank also faced more than $7bn in unsettled foreign exchange obligations, an expanding development-finance portfolio and weakened confidence in monetary management.<\/p>\n\n\n\n

Cardoso\u2019s response was built around a return to conventional central banking. The CBN scaled back development financing, tightened monetary conditions, reduced discretionary foreign exchange allocation and raised capital requirements for banks.<\/p>\n\n\n\n

Three years later, the picture has improved considerably, although high costs remain. Reserves have climbed above $55bn, the foreign exchange market has become more transparent, banks have raised trillions of naira in fresh capital, and inflationary pressures have moderated.<\/p>\n\n\n\n

But interest rates remain high, the naira is substantially weaker than in 2023, and households continue to bear the accumulated effects of earlier increases in food, transport, energy and housing costs.<\/p>\n\n\n\n

Tightening to recalibration<\/strong><\/p>\n\n\n\n

Cardoso\u2019s most consequential shift was returning price stability to the centre of monetary policy.<\/p>\n\n\n\n

Under the previous leadership, the CBN became heavily involved in financing agriculture, manufacturing, aviation, electricity and other sectors. Cardoso\u2019s administration began reducing direct interventions and concentrating on inflation, liquidity management and financial stability.<\/p>\n\n\n\n

He recently defended the return to orthodox monetary policy, arguing that the previous approach had blurred institutional responsibilities.<\/p>\n\n\n\n

A recent statement from the apex bank read, \u201cAccording to him, these challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions. He also observed that the foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination further constrained economic outcomes.\u201d<\/p>\n\n\n\n

When the MPC reconvened in February 2024 after a prolonged break, it raised the MPR by 400 basis points from 18.75 per cent to 22.75 per cent. The rate rose to 24.75 per cent in March,<\/p>\n\n\n\n

26.25 per cent in May, 26.75 per cent in July, 27.25 per cent in September and 27.50 per cent in<\/p>\n\n\n\n

November.<\/p>\n\n\n\n

The tightening cycle began reversing in September 2025 when the MPC reduced the rate by 50 basis points to 27 per cent. It held the rate in November before another 50-basis-point reduction to 26.5 per cent in February 2026. The benchmark was retained in May and July.<\/p>\n\n\n\n

A bigger shift came in September when the MPC reset the MPR by 350 basis points to 23 per cent and recalibrated the Standing Facilities Corridor to +50\/-300 basis points. It retained the Cash Reserve Requirement at 45 per cent for deposit money banks.<\/p>\n\n\n\n

Cardoso described the move not simply as easing but as a reset intended partly to reconnect the policy rate with prevailing money-market conditions and improve monetary-policy transmission.<\/p>\n\n\n\n

Headline inflation, which peaked at 34.80 per cent in December 2024 under the old Consumer<\/p>\n\n\n\n

Price Index, stood at 15.39 per cent in August 2026.<\/p>\n\n\n\n

However, the National Bureau of Statistics rebased the CPI in January 2025, changed expenditure weights and adopted a new reference year, meaning the old and new series are not directly comparable.<\/p>\n\n\n\n

The rebased series nevertheless indicates moderating inflationary pressure. Inflation eased from<\/p>\n\n\n\n

15.93 per cent in May to 15.91 per cent in June, 15.43 per cent in July and 15.39 per cent in<\/p>\n\n\n\n

August.<\/p>\n\n\n\n

The next challenge is transmission. Commercial lending rates exceeded 30 per cent in parts of the market during the tightening cycle. Private-sector credit increased by eight per cent from N74.63tn in April 2025 to N80.59tn in April 2026, while credit to the government jumped 65.4 per cent from N23.93tn to N39.60tn.<\/p>\n\n\n\n

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, has warned that rising Federal Government borrowing from the domestic financial system is increasingly crowding out businesses as banks favour lower-risk, high-yield government securities.<\/p>\n\n\n\n

The September rate reset therefore begins a different test: whether improving monetary conditions will reduce borrowing costs and redirect more credit towards productive businesses.<\/p>\n\n\n\n

Reforms rebuild buffers<\/strong><\/p>\n\n\n\n

The foreign exchange market offers some of the clearest evidence of improvement under<\/p>\n\n\n\n

Cardoso, although it also imposed perhaps the most visible adjustment costs.<\/p>\n\n\n\n

Exchange-rate unification began in June 2023 before he assumed office. Cardoso inherited a market with more than $7bn in unsettled obligations, a wide official-parallel market gap and weak confidence among businesses and investors.<\/p>\n\n\n\n

The CBN verified the outstanding claims and subsequently announced that it had cleared all valid obligations. It introduced the Electronic Foreign Exchange Matching System, revised regulations for Bureau de Change operators and strengthened reporting requirements for authorised dealers and International Money Transfer Operators.<\/p>\n\n\n\n

In May 2026, the bank launched the fourth edition of the Foreign Exchange Manual, while licensed BDCs gained structured access to foreign exchange through authorised dealer banks.<\/p>\n\n\n\n

Emerging markets expert Ike Ibeabuchi earlier acknowledged the reforms while stressing that other factors also contributed.<\/p>\n\n\n\n

\u201cCardoso introduced several reforms that have stabilised the FX market. But he is also lucky to have met Dangote Refinery and a reform-minded president who has made his work quite easier,\u201d Ibeabuchi said.<\/p>\n\n\n\n

The reforms did not prevent substantial depreciation. From about N770\/$ in September 2023, the official rate weakened beyond N1,600\/$ during periods of volatility before subsequently recovering.<\/p>\n\n\n\n

External buffers, however, strengthened substantially. Gross reserves increased from about<\/p>\n\n\n\n

$33.2bn when Cardoso assumed office to $40.19bn at the end of 2024 and $45.71bn at the end of<\/p>\n\n\n\n

2025.<\/p>\n\n\n\n

By September 18, 2026, the MPC put gross external reserves at $55.25bn, their highest level in<\/p>\n\n\n\n

18 years and sufficient to cover about 11.3 months of imports. Compared with the roughly<\/p>\n\n\n\n

$33.2bn inherited in September 2023, that represents an increase of about $22.05bn or 66.4 per cent.<\/p>\n\n\n\n

The quality of the reserve position also improved. Net foreign exchange reserves rose from<\/p>\n\n\n\n

$3.99bn at the end of 2023 to $23.11bn in 2024 and $34.80bn in 2025. Nigeria\u2019s balance of<\/p>\n\n\n\n

payments moved from deficits of $3.32bn in 2022 and $3.34bn in 2023 to a $6.83bn surplus in<\/p>\n\n\n\n

2024.<\/p>\n\n\n\n

But the composition of capital flows remains important. Portfolio investment accounted for<\/p>\n\n\n\n

$5.2bn, or 92.25 per cent, of capital importation in the first quarter of 2025, compared with foreign direct investment of only $126.29m.<\/p>\n\n\n\n

The Director of Deals Advisory at PwC, Wale Olusi, earlier argued that monetary policy should not be framed simply as a contest between foreign portfolio investors and domestic businesses.<\/p>\n\n\n\n

\u201cThat is the job of the central bank. They target job stabilisation of the macroeconomy, which they have achieved,\u201d Olusi said.<\/p>\n\n\n\n

The September rate reduction now changes that balancing act. Lower rates could support domestic investment and reduce financing costs, but they must be managed without undermining foreign-exchange stability.<\/p>\n\n\n\n

Banks face credit test<\/strong><\/p>\n\n\n\n

Cardoso also initiated Nigeria\u2019s largest banking recapitalisation programme since the 2004<\/p>\n\n\n\n

consolidation exercise.<\/p>\n\n\n\n

In March 2024, the CBN raised minimum capital requirements to N500bn for commercial banks with international authorisation, N200bn for national banks and N50bn for regional banks.<\/p>\n\n\n\n

Merchant banks were required to maintain N50bn, while non-interest banks faced thresholds of N10bn or N20bn depending on their licences. By the March 31, 2026 deadline, 33 banks had reportedly met the revised requirements, raising approximately N4.65tn, with 72.55 per cent coming from domestic investors.<\/p>\n\n\n\n

The recapitalisation should strengthen banks\u2019 ability to absorb shocks and finance larger<\/p>\n\n\n\n

transactions, but the bigger economic question is how the additional capital will be deployed.<\/p>\n\n\n\n

President Bola Tinubu recently challenged banks to convert stronger balance sheets into affordable financing for businesses.<\/p>\n\n\n\n

Speaking through the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, he said, \u201cA resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturing that is struggling cannot expand, and millions of productive MSMEs remain outside of the formal financial system.\u201d<\/p>\n\n\n\n

That challenge has become more significant following the September rate reset. Banks now have substantially larger capital buffers and a lower benchmark interest rate, but the CRR remains<\/p>\n\n\n\n

high at 45 per cent.<\/p>\n\n\n\n

Converting stronger bank capital and lower policy rates into affordable financing for manufacturing, agriculture, infrastructure, exports and MSMEs is therefore emerging as one of the biggest tests of the next phase of Cardoso\u2019s reforms.<\/p>\n\n\n\n

Harder test begins<\/p>\n\n\n\n

Economic activity has strengthened alongside the improvement in financial indicators.<\/p>\n\n\n\n

Real GDP expanded by 4.43 per cent in the second quarter of 2026, accelerating from 3.89 per cent in the first quarter. The Purchasing Managers\u2019 Index reached 54.3 points in August, signalling continued expansion in business activity.<\/p>\n\n\n\n

But the productive economy has not moved at the same pace. Manufacturing grew by 3.24 per cent in the second quarter, while its share of real GDP declined from 7.81 per cent to 7.72 per cent.<\/p>\n\n\n\n

This distinction increasingly defines Cardoso\u2019s next challenge.<\/p>\n\n\n\n

During the signing of a Memorandum of Understanding on Fiscal-Monetary Policy Coordination between the Federal Ministry of Finance and the CBN, Oyedele said the government\u2019s objective was to push inflation sustainably into single digits.<\/p>\n\n\n\n

\u201cOur objective is to bring inflation sustainably into single digits and keep it there \u2014 and that<\/p>\n\n\n\n

cannot be monetary policy\u2019s job alone,\u201d he said.<\/p>\n\n\n\n

\u201cFiscal policy must play its part: disciplined, disinflationary spending; sound cash and liquidity<\/p>\n\n\n\n

management; efficient financing that does not crowd out the private sector.\u201d<\/p>\n\n\n\n

The International Monetary Fund has similarly urged Nigeria and other major African economies to deepen fiscal, monetary and governance reforms, identifying tax policy, revenue mobilisation, public financial management and spending efficiency among Nigeria\u2019s continuing priorities.<\/p>\n\n\n\n

Three years into Cardoso\u2019s tenure, the policy challenge has consequently shifted.<\/p>\n\n\n\n

The early phase was dominated by crisis management \u2014 rebuilding confidence in the foreign exchange market, tightening liquidity, strengthening reserves, recapitalising banks and containing inflation.<\/p>\n\n\n\n

The September reduction of the MPR to 23 per cent signals the beginning of a different phase.<\/p>\n\n\n\n

The CBN must now demonstrate that the stability it has spent three years building can translate into cheaper business credit, stronger private investment and faster productive-sector growth without reigniting inflation or destabilising the naira.<\/p>\n\n\n\n

For ordinary Nigerians, the benchmark will be even more straightforward. Falling inflation does not reverse previous price increases, higher reserves do not automatically raise household<\/p>\n\n\n\n

incomes, and stronger bank balance sheets mean little if businesses cannot borrow affordably enough to expand and create jobs.<\/p>\n\n\n\n

Cardoso\u2019s first three years have largely been about rebuilding monetary and financial stability. The harder test is whether those gains can now move beyond the CBN\u2019s balance sheet and macroeconomic indicators to businesses, jobs, incomes and household living standards.<\/p>\n\n\n\n

Source: https:\/\/punchng.com\/cbns-three-year-reforms-face-real-economy-test\/<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Activity in Nigeria\u2019s foreign exchange market recorded a sharp contraction during the week ended on Friday, 2 October, 2026, as liquidity tightened following a notable surge in trading volume the preceding week. The drop reflects ongoing adjustments in FX supply dynamics and seasonal demand fluctuations across the Nigerian Autonomous Foreign Exchange Market, where institutional liquidity… <\/p>\n

<\/div>\n

Read More \u2192<\/a><\/p>\n","protected":false},"author":2,"featured_media":10628,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-10627","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fit-row"],"jetpack_featured_media_url":"https:\/\/ograsset.com\/wp-content\/uploads\/2026\/10\/image-2.png","_links":{"self":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts\/10627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/comments?post=10627"}],"version-history":[{"count":2,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts\/10627\/revisions"}],"predecessor-version":[{"id":10630,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/posts\/10627\/revisions\/10630"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/media\/10628"}],"wp:attachment":[{"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/media?parent=10627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/categories?post=10627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ograsset.com\/index.php\/wp-json\/wp\/v2\/tags?post=10627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}