Market News

LAGOS – Foreign exchange (FX) inflows into Nigeria rose sharply to $32.4 billion in the first quarter of 2026, driven largely by autonomous sources, even as inflows through the Cen­tral Bank of Nigeria (CBN) moderated during the period.

Data contained in the CBN’s latest Quarterly Statistical Bulletin showed that total FX inflows increased by 13 per cent quarter-on-quarter (q/q) and 11 per cent year-on-year (y/y) by the end of Q1 2026.

The stronger inflow position came alongside a mixed movement in FX outflows, resulting in a significant im­provement in Nigeria’s net external FX position.

Total FX outflows stood at $11.1 billion during the quarter, representing an 11 per cent q/q increase but a 21 per cent decline compared with Q1 2025.

Consequently, the country recorded a net FX inflow of $21.3 billion, up 15 per cent q/q and approximately 41 per cent y/y.

The data showed that autonomous sources were at the heart of the improve­ment, accounting for the entire quarterly increase in total FX inflows.

FX inflows through autonomous sources climbed 24 per cent q/q to $22.2 billion, representing about 68 per cent of total FX inflows into the economy during the quarter.

In contrast, FX inflows through the CBN fell by four per cent q/q to $10.2 bil­lion, although the figure remained 23 per cent higher than the corresponding level recorded in Q1 2025.

The divergent performance highlights the growing importance of non-CBN channels in supplying foreign currency to the Nigerian economy.

According to the data, the $22.2 billion recorded through autonomous sources more than offset the $430 million decline in inflows through the CBN, providing the major boost to aggregate FX liquidity during the quarter.

On the outflow side, transactions through the CBN rose five per cent q/q to $7.4 billion, accounting for approximately 67 per cent of total FX outflows.

Meanwhile, FX outflows through au­tonomous sources increased more sharp­ly, rising 28 per cent q/q and seven per cent y/y to $3.6 billion from $2.8 billion in the preceding quarter.

Despite the increase in autonomous outflows, the substantial rise in autono­mous inflows meant that net autonomous FX flows strengthened by 23 per cent q/q to $18.6 billion.

By comparison, net FX flows through the CBN moderated by 21 per cent to $2.8 billion.

The performance underscores the increasing role of market-based and pri­vate-sector channels in supporting Nige­ria’s external liquidity position, at a time when monetary conditions remained relatively restrictive.

Analysts have linked the strength of FX inflows partly to the attractive car­ry-trade opportunities created by Nige­ria’s elevated interest rates. The relative­ly high returns available on naira assets helped sustain foreign portfolio interest and supported the supply of foreign cur­rency into the domestic market.

The stronger FX liquidity also pro­vided support for the naira during the quarter.

The domestic currency appreciat­ed by approximately 4.6 per cent q/q to N1,384.01/$, reflecting improved supply conditions and increased liquidity in the foreign exchange market.

However, the outlook for FX liquidity could face fresh pressure following the CBN’s latest monetary policy adjustment.

The Monetary Policy Committee re­cently cut the Monetary Policy Rate by 350 basis points to 23 per cent. While the reduction is expected to ease domestic financing conditions, narrower inter­est-rate differentials could reduce the rel­ative attractiveness of naira-denominated assets to offshore investors.