Nigeria’s foreign exchange market turnover fell 35.41% to $1.70 billion in the week ended October 2, with the contraction concentrated in spot trading while forward transactions increased, according to figures attributed to FMDQ.
Turnover in Nigeria’s foreign exchange market fell sharply in the week ended October 2, dropping 35.41% to $1.70 billion from $2.63 billion a week earlier, according to figures attributed to FMDQ’s latest FX Market Analysis Report.
The decline amounted to about $930.18 million in weekly turnover and reversed the increase recorded in the preceding week.
Average daily turnover across the spot and derivatives markets fell to $424.24 million, from $525.43 million in the week ended September 25.
The fall was driven overwhelmingly by the spot market.
Spot FX turnover dropped 36.93% to $1.63 billion from $2.59 billion, a decline of about $955.70 million.
Spot transactions still accounted for 96.19% of total FX turnover, according to the reported FMDQ figures.
The data point to a substantially quieter week for immediate FX transactions after the previous week’s rebound.
But lower turnover does not, by itself, establish why trading activity changed or whether underlying dollar supply deteriorated.
Spot trading drives the contraction
The size of the spot-market decline is important because spot transactions represent the immediate buying and selling of currencies rather than contracts for settlement at a later date.
Average daily spot turnover fell to $408.06 million from $517.59 million in the previous week.
The preceding week had recorded total FX turnover of $2.63 billion, up 11.02% from $2.37 billion in the week ended September 18.
That sequence shows how volatile weekly turnover can be.
A 35.4% fall after an 11% rise should therefore be read in the context of recent weekly movements rather than treated automatically as evidence of a structural deterioration in Nigeria’s FX market.
Derivatives turnover moves in the opposite direction
While spot activity contracted, reported FX derivatives turnover moved sharply higher.
Derivatives turnover rose 65.09% to $64.73 million from $39.21 million a week earlier.
The increase was equivalent to about $25.52 million.
The derivatives segment consisted entirely of FX forwards during the period and increased its share of total FX turnover to 3.81% from 1.49%.
Average daily derivatives turnover rose to $16.18 million from $7.84 million.
The divergence matters.
The market recorded less immediate spot activity but more forward-market activity.
That change shows a shift in the composition of weekly trading, but the turnover figures alone do not establish the motives of individual market participants.
Lower turnover is not the same as naira depreciation
Market turnover and the exchange rate measure different things.
Turnover shows the value of transactions taking place in the market.
The exchange rate shows the price at which currencies are exchanged.
A decline in turnover does not automatically mean the naira weakened, just as a rise in turnover does not automatically imply appreciation.
FMDQ’s market-turnover framework is based on weekly trade submissions by dealing-member banks and covers transactions among dealing members, clients and the Central Bank of Nigeria.
The published turnover figures exclude primary-market auctions.
That scope matters when interpreting changes in weekly activity.
The $1.70 billion figure establishes that substantially less FX trading was reported during the week.
It does not, on its own, establish what caused the contraction.
One week does not establish a liquidity trend
The October 2 data provide a clear weekly signal: FX turnover contracted sharply, particularly in the spot market, while forward activity increased.
What they do not yet establish is whether the fall represents the beginning of a sustained reduction in market activity.
That requires a longer sequence of trading data alongside exchange-rate movements, central-bank activity, portfolio flows and other sources of FX supply and demand.
The next FMDQ weekly report will therefore be important.
If spot turnover remains depressed across several reporting periods, the market would have stronger evidence of a persistent reduction in trading activity.
If turnover rebounds, the October 2 reading may instead prove to have been a sharp but temporary weekly adjustment.
For now, the verified signal is narrower:
Nigeria’s reported FX turnover fell from $2.63 billion to $1.70 billion in one week, with the contraction concentrated in the spot market while forward transactions increased.