Forex Utilisation Rises By 74% To $16.35bn In Q1 2026

Foreign exchange utilisation across various sectors of the Nigerian economy rose significantly by 74 per cent year-on-year to $16.349 billion in the first quarter of 2026, from $9.336 billion recorded in the corresponding period of 2025.

According to the Central Bank of Nigeria’s (CBN) Quarterly Statistical Bulletin, the increase reflected stronger foreign exchange activity amid improved market liquidity, although the composition of demand showed that invisible transactions accounted for the bulk of utilisation during the period.

Invisible transactions more than doubled to $11.387 billion in Q1 2026 from $4.485 billion in the first three months of last year, accounting for about 70 per cent of total forex utilisation. Financial services remained the largest driver of invisible transactions, with utilisation rising by 117 per cent year on year to $9 billion.

Monthly figures showed a steady increase in demand, with utilisation rising from $1.78 billion in January to $2.78 billion in February and $4.42 billion in March 2026. The March figure was more than twice the $2.13 billion recorded in March 2025, suggesting that improved forex availability enabled a higher volume of financial transactions to be executed through the formal market.

Business services also recorded stronger activity, with forex utilisation rising to $1.2 billion in Q1’26, compared with $223.6 million in the corresponding period of 2025.

On the visible-import side, however, the increase was more moderate, as forex utilisation for merchandise imports remained broadly stable at $4.9 billion, representing a marginal 0.2 per cent year on year increase.

Industrial-sector utilisation declined by 20 per cent year on year to $1.8 billion, showing lower demand for imported raw materials, machinery and equipment. On the other hand, utilisation for manufactured products increased to $1.1 billion from $477.9 million, while transport products rose to $295 million from $142.8 million.

The monthly data further showed that the rise in forex activity gathered momentum during the quarter. Total utilisation increased from $2.92 billion in January 2025 to $3.58 billion in February and $3.77 billion in March, compared with $4.84 billion, $4.72 billion and $6.70 billion respectively in the corresponding months of 2026.

March 2026 therefore recorded the highest monthly utilisation in the available series, pointing to increased activity in the forex market.

Analysts at Cordros Research commenting, said visible imports were likely to remain constrained, particularly as domestic refining activity expands. “Looking ahead, we expect visible imports to remain constrained, partly reflecting lower refined petroleum products import as domestic refining activity expands.

“We also expect forex liquidity conditions to remain broadly stable in the near term, supported by improving macroeconomic conditions and continued CBN measures to support forex market liquidity.

This should provide greater scope for increased forex utilisation across sectors,” the analysts said.

Similarly, analysts at Cowry Asset Management said the sustainability of forex supply would remain critical to the trajectory of utilisation.

“Going forward, the trajectory of forex utilisation will remain closely linked to the sustainability of forex supply. Continued CBN reforms, stronger reserve buffers and improved market liquidity should support further growth in formal forex transactions,” they said.

The analysts added that the composition of demand would be important in determining whether the stronger forex utilisation translates into broader productive activity. “At the same time, the composition of demand will be worth monitoring, particularly whether stronger utilisation increasingly extends towards industrial inputs and capital goods, which would provide a more direct indication of improving productive activity,” they said.

They described the Q1’26 numbers as “reasonably constructive”, noting that forex demand was recovering alongside the market’s capacity to accommodate it. “Overall, the Q1’26 numbers present a reasonably constructive picture: FX demand is recovering, but so too is the market’s capacity to accommodate it,” Cowry Asset Management said.

The analysts said maintaining the balance would be important for naira stability, confidence and a more predictable operating environment for businesses. “We expect forex utilisation to remain elevated through 2026 as exchange-rate stability improves visibility for businesses, CBN reforms deepen the formal forex market and stronger reserve buffers support liquidity,” they said.