Nigeria’s official foreign exchange market recorded a notable rise in trading activity in April with total turnover crossing the $10 billion mark as the naira showed signs of stabilising against the U.S. dollar.
The local currency closed the month around ₦1,374.94 per dollar, indicating a slight improvement compared to prior sessions.
The gain coincided with a broader increase in market participation and stronger availability of foreign currency within the system.
Trading data indicated a surge in deal volumes during the period, suggesting renewed engagement from both domestic institutions and offshore investors.
The increase in transactions points to a more active market environment compared to previous months when liquidity constraints restricted trading depth.
Market participants linked the improved conditions to a combination of policy adjustments and gradual return of investor confidence.
The recent foreign exchange framework has encouraged more transparent pricing, allowing supply and demand forces to play a greater role in determining the exchange rate.
Despite the uptick in activity, pressure on the naira remains evident. Demand for foreign currency continues to be driven by importers, manufacturers and other businesses with external payment obligations.
This underlying demand has limited the extent of the naira’s appreciation, even as liquidity improves.
The crossing of the $10 billion threshold signals progress in efforts to deepen the foreign exchange market, but analysts caution that sustainability will depend on consistent inflows.
Without steady capital entry, particularly from foreign portfolio investors and export earnings, the gains may prove temporary.
Global developments are also shaping the outlook. Elevated crude oil prices have supported foreign exchange inflows for oil-exporting economies like Nigeria, but they have also introduced inflationary pressures that could influence monetary policy decisions.
As the Central Bank continues to manage the evolving FX framework, investors are watching closely for signals on interest rates, liquidity management and potential interventions. These factors will be critical in determining whether the naira can maintain its recent stability or face renewed volatility.
For now, the increase in FX turnover and the naira’s modest recovery point to a market that is becoming more active, but still navigating structural imbalances between supply and demand.