Naira firms at N1,320/$ as NFEM turnover plunges to five-month low

Foreign exchange turnover in the Nigerian Foreign Exchange Market (NFEM) plummeted to a five-month low on Monday, September 7, with the naira strengthening to N1,320/$, according to data from the Central Bank of Nigeria (CBN). Daily NFEM turnover plummeted by 78.4% from N495.70 million recorded on September 4, revealing a significant dip in trading activity at the beginning of the new week.

Despite the reduced market volume, the naira gained 0.19% to N1,320/$ at the close of trading, contrasting with N1,322.50/$ on the preceding trading day. This marked the lowest NFEM turnover since April 2, when it stood at N73.90 million. The currency fluctuated between N1,318.50/$ and N1,322.50/$ throughout the session, while the weighted average rate settled at N1,320.56/$.

Market volatility has persisted in recent weeks, with turnover fluctuating between N674.38 million on September 3 and N495.70 million on September 4, and further decreasing on Monday. This downturn stands in stark contrast to the robust turnover levels observed in August, during which the market recorded its strongest weekly performance in 2026, with total transactions in the FX Spot and Derivatives markets surging by 146.12% to $5.06 billion in the week ending August 21, 2026.

The recent surge in external reserves coincides with the CBN's persistent tight monetary policy aimed at taming inflation and fostering macroeconomic stability. Nigeria's forex market witnessed its steepest weekly turnover decline in 2026, with total transactions in the FX Spot and Derivatives markets contracting by 46.57% to $1.631 billion in the week ending July 10, 2026, marking the largest single-week drop in FX market turnover recorded so far in 2026.

Nairametrics had previously reported that FMDQ's cumulative turnover for the January–July 2026 period amounted to N426.51 trillion ($310.18 billion), with foreign exchange transactions among the primary contributors, alongside Open Market Operations (OMO) Bills.