CBN Interventions, Stronger Exports Push May FX Inflows To $3.7bn

Nigeria’s foreign exchange inflows rose by 31 per cent month-on-month to $3.7 billion in May 2026, supported by stronger export receipts and CBN interventions that improved liquidity in the market. The increase helped the naira record modest gains against the dollar, even as global uncertainties and weak demand pressures persisted.

Data from FMDQ Exchange showed that the rebound followed two consecutive months of decline, although inflows were still 44 per cent lower year-on-year, reflecting lingering liquidity constraints and cautious foreign investor sentiment. Domestic inflows dominated the market in May, rising to about $2.1 billion from $1.2 billion in April and accounting for 56 per cent of total inflows.

Exporter proceeds were the main driver of domestic FX supply, jumping 107 per cent month-on-month to $1.4 billion, accounting for 68 per cent of domestic inflows.

However, on a year-on-year basis, forex inflows declined by 44 per cent, reflecting lingering liquidity constraints and cautious foreign investor sentiment across emerging markets.

The report showed that domestic inflows became the dominant source of forex supply during the month, contributing about $2.1 billion, compared to $1.2 billion recorded in April. Domestic sources accounted for around 56 per cent of total inflows in May.

Proceeds from exporters remained the major driver of domestic foreign exchange liquidity, with inflows surging 107 per cent month-on-month to $1.4 billion, accounting for 68 per cent of total domestic forex supply.

According to analysts at Quest Merchant Bank, the development was largely attributed to stronger oil export receipts, supported by elevated global crude oil prices amid supply disruptions linked to the ongoing Middle East conflict.

The Central Bank of Nigeria (CBN) also supported market liquidity through interventions, with total forex sales rising to about $125 million in May from $104 million in April. Similarly, inflows from corporates and individuals increased to $520 million and $13.8 million respectively, compared with $415 million and $14.8 million recorded in the previous month.

Foreign inflows also remained relatively resilient despite prevailing global headwinds. Total foreign inflows rose slightly to $1.7 billion in May from $1.6 billion in April.

Foreign portfolio investments (FPIs) accounted for about 98 per cent of the foreign supply, with total inflows rising to $1.62 billion from $1.57 billion in April and $1.13 billion in the corresponding period last year.

Further analysis showed that fixed-income instruments accounted for $1.55 billion of FPI inflows during the review period. Meanwhile, data released by the CBN showed that the naira appreciated by 0.22 per cent month-on-month at the official market to close May at N1,372 to the dollar

At the parallel market, the local currency also appreciated by 0.6 per cent to close at N1,390 per dollar narrowing the gap between official and unofficial exchange rates and strengthening confidence in the forex market.

Analysts at Quest Merchant Bank attributed the naira’s resilience to improved domestic forex supply conditions and softer demand pressures, as heightened global uncertainty disrupted supply chains and weakened import demand.

According to the report, reduced import activities and cautious trade flows moderated FX demand from importers and corporates, thereby easing pressure on the local currency.

Nigeria’s gross external reserves also rebounded to $49.6 billion in May after two consecutive months of decline. The earlier depletion, according to the CBN governor during the May Monetary Policy Committee meeting, was due mainly to external debt service obligations.

The analysts, however, expressed optimism that the naira would remain relatively stable over the near to medium term, supported by sustained domestic forex inflows, resilient offshore investments and easing demand-side pressures linked to subdued import activities.

” Looking ahead, we expect the naira to remain resilient over the near to medium term, supported by adequate liquidity conditions driven by sustained domestic inflows and still robust offshore inflows.

“In addition, we anticipate easing demand side pressures, as the ongoing conflict in the Middle East continues to suppress import activity,” the analysts noted.