Domestic Forex Inflows Surge 148% In October

Domestic foreign exchange inflows into the Nigerian Foreign Exchange Market (NFEM) surged by 148.1 per cent to $5.11 billion in October 2026, driving a 61.7 per cent increase in total market inflows to $8.28 billion.

Data from FMDQ showed that total inflows rose from $5.12 billion recorded in September to $8.28 billion in October, reflecting stronger contributions from domestic sources, which accounted for 61.7 per cent of total inflows during the period.

Foreign sources contributed the remaining 38.3 per cent, with gross foreign exchange inflows increasing marginally by 3.5 per cent to $3.17 billion, compared with $3.06 billion in the preceding month.

The sharp increase in domestic inflows was supported by higher contributions from the Central Bank of Nigeria (CBN), individuals, exporters and importers, as well as non-bank corporates. Specifically, inflows from the CBN rose by 421.7 per cent month-on-month, while contributions from individuals increased by 74 per cent.

Similarly, inflows from exporters and importers grew by 71.5 per cent, while non-bank corporates recorded a 55.5 per cent increase. The development points to a stronger contribution from domestic sources in supporting foreign exchange liquidity, as their share of total market inflows expanded significantly during the month.

However, despite the increase in gross foreign inflows, the market recorded net foreign exchange outflows of $1.41 billion in October, reversing the net inflows of $1.03 billion recorded in September.

The reversal in foreign flows could have increased pressure on the market’s supply-demand balance, potentially requiring greater intervention by the CBN to support liquidity and limit exchange rate volatility.

Further analysis of foreign inflows showed that increased contributions from foreign portfolio investors and foreign direct investment supported the marginal growth in gross foreign exchange receipts.

Foreign portfolio investment inflows increased by 3.4 per cent month-on-month, while foreign direct investment recorded a significant increase of 227.3 per cent. These gains, however, offset an 11.8 per cent decline in inflows from other foreign corporates.

Despite the net foreign outflows recorded in October, the outlook for foreign exchange liquidity remains positive in the near term, supported by continued foreign investor interest in naira-denominated assets and attractive domestic yields, even with their recent moderation.

These factors are expected to sustain portfolio investment inflows, although geopolitical uncertainties and changes in global investor risk appetite could trigger intermittent volatility in foreign investment flows.

The CBN is also expected to remain active in the foreign exchange market, intervening where necessary to address temporary supply-demand imbalances, ease exchange rate pressures and maintain relative stability in the naira.