Naira FX Turnover Skyrockets 262% in One Year under CBN’s EFEMS
Naira FX Turnover Skyrockets 262% in One Year under CBN’s EFEMS
Nigeria’s foreign exchange market experienced a dramatic recovery in the first half of 2025, with turnover surging 262.4% to $52.47 billion, up from $14.48 billion in the previous half-year.
The Central Bank of Nigeria (CBN) attributed this massive growth to the Electronic Foreign Exchange Matching System (EFEMS), which significantly boosted market participation and transparency.
Trading activity saw a substantial rise as FX sales climbed to $4.74 billion, compared to $3.18 billion in late 2024, while purchases reached $3.97 billion.
This resulted in net sales of $0.77 billion for the period. Notably, the report highlighted a total absence of new forward transactions, signaling a shift in how market participants are managing their future currency needs.
The Naira showed mixed movements, recording a marginal depreciation of N1.38 in the official market to close at N1,422.07 per dollar. Conversely, the parallel market saw slight gains, with the rate improving to N1,487 from a steady N1,490.
This narrowing gap suggests a stabilization in retail sentiment as the market adjusts to the CBN’s new liquidity measures.
Nigeria’s external reserves reached a robust $45.98 billion by January 21, 2026, providing a strong cushion for the economy.
The Naira also appreciated by 0.76% in H1 2025, reversing a previous 1.73% depreciation trend. This recovery was fueled by improved liquidity and the adoption of the Nigerian FX Code, which strengthened investor confidence through better price discovery.
In the derivatives sector, the market focused on clearing old obligations rather than initiating new ones, as no new OTC FX futures contracts were recorded. Matured contracts totaling $86.49 million were settled, causing outstanding futures to plummet from $88.05 million to just $1.56 million.
This reduction indicates a significant cleaning of the central bank’s future FX liabilities.
The N720 billion/CNY15 billion Bilateral Currency Swap Agreement with China remained active following its 2024 renewal, though no new transactions occurred in H1 2025.
Cumulative sales under the agreement held steady at CNY9.22 billion. This swap continues to serve as a strategic tool for facilitating trade and managing currency pressure between the two nations.
To maintain market integrity, the CBN conducted rigorous examinations of 34 Authorized Dealers, including 29 commercial and five merchant banks. These audits verified FX sources and ensured that funds were utilized strictly for eligible transactions.
By enforcing these ethical standards, the CBN aims to sustain the transparency and efficiency of the evolving foreign exchange landscape.
