By Boluwatife Oshadiya, | May 19, 2026
Key Points
- Foreign portfolio investors accounted for 59.15% of Nigeria’s FX inflows last week
- Total foreign exchange inflows settled at $870 million, according to Coronation Merchant Bank
- The naira weakened to ₦1,371.04/$ at the official market despite improved reserves
Main Story
Foreign portfolio investors remained the dominant source of foreign exchange supply in Nigeria’s currency market last week, accounting for more than 59 percent of total inflows, according to data released by Coronation Merchant Bank.
In its latest market report, Coronation Research disclosed that total FX inflows into the market settled at $870 million during the period under review, with offshore investors contributing $520 million.
The report showed that exporters accounted for $220 million, representing 24.88 percent of total inflows, while non-bank corporates contributed $120 million or 14.45 percent.
Other sources, including foreign direct investments, individuals and corporate inflows, accounted for just $10 million, equivalent to 1.33 percent of aggregate FX supply.
Despite the relatively strong inflow levels, fluctuations in market liquidity and limited monetary authority interventions weighed on the naira’s performance.
At the official market, the naira depreciated by 0.71 percent week-on-week to close at ₦1,371.04 per dollar, reversing gains recorded in the previous week.
At the parallel market, however, the local currency traded flat at ₦1,400 per dollar, narrowing the spread between the official and unofficial markets to ₦28.96 per dollar or 2.11 percent.
Meanwhile, data from the Central Bank of Nigeria showed that the country’s gross external reserves rose by $218.04 million to $48.54 billion, supported largely by crude oil export receipts and foreign portfolio inflows.
The Issues
Nigeria’s foreign exchange market remains heavily dependent on short-term offshore inflows, raising concerns about the sustainability of liquidity conditions in periods of global uncertainty.
While foreign portfolio investments help support reserves and stabilise the naira in the short term, they are often highly sensitive to global interest rates, inflation trends and investor sentiment.
The relatively small contribution from non-oil exports and foreign direct investments also underscores Nigeria’s ongoing challenge in building stable, long-term FX supply channels.
Analysts have repeatedly stressed the need for stronger export diversification, improved investor confidence and sustained structural reforms to reduce pressure on the currency market.
What’s Being Said
“In the near term, we expect the naira to trade within a relatively stable range, supported by continued CBN interventions, improved foreign portfolio inflows and sustained market reforms,” Coronation Research said in its market outlook.
“The narrowing spread between official and parallel market rates suggests gradual improvement in price discovery and FX market efficiency,” a Lagos-based currency analyst noted.
What’s Next
- Investors will monitor the pace of foreign portfolio inflows into Nigeria’s debt and FX markets
- The Central Bank of Nigeria is expected to sustain interventions aimed at improving market liquidity
- Market participants will also track oil prices and reserve levels for indications of future naira stability
The Bottom Line: Nigeria’s FX market is increasingly reliant on offshore capital to maintain liquidity and exchange rate stability. While inflows remain supportive for now, the economy’s long-term resilience will depend on deeper structural reforms and stronger non-oil dollar earnings.
