Nigeria Records 871% Surge in Net Forex Inflows as Dollar Liquidity Strengthens

Foreign capital inflows, improved oil earnings boost reserves, ease pressure on naira

ABUJA, November 9, 2026

Nigeria’s foreign exchange market has recorded a significant improvement, with net foreign exchange inflows rising by approximately 871 per cent over four years, reflecting increased dollar availability and improved external financial conditions.

Data from the Central Bank of Nigeria (CBN), as reported by BusinessDay, showed that net FX inflows climbed from $950 million in 2022 to $9.22 billion in January 2026, representing a substantial increase in the country’s net foreign currency position.

The January 2026 performance marked a sharp improvement over the $3.11 billion recorded in December 2025. Total foreign exchange inflows also rose by 45.24 per cent, from $8.42 billion in December to $12.23 billion in January, while lower outflows contributed to the stronger net position.

The improved foreign exchange outlook has been supported by stronger portfolio investments, increased oil receipts and renewed investor interest in the Nigerian economy.

Foreign portfolio investments reportedly reached $15.8 billion in the first nine months of 2026, compared with $12.2 billion during the corresponding period of 2025, indicating increased participation by international investors in Nigeria’s financial markets.

The country’s external reserves also recorded substantial growth, adding $6.5 billion within five months to reach $54.9 billion at the end of September 2026.

Analysts at Quest Merchant Bank attributed the improvement in foreign exchange liquidity to sustained capital inflows, better oil receipts and improved investor sentiment. These developments, they noted, have helped moderate exchange rate volatility and reduce pressure on the naira.

However, sustaining the gains will depend on policy consistency, improved economic fundamentals and the development of more reliable foreign exchange revenue sources.

The improved dollar supply is also creating room for commercial banks to review restrictions previously imposed on international transactions through naira-denominated debit cards.

Following prolonged foreign exchange shortages that limited overseas card payments, some financial institutions have increased their international spending allowances.

FirstBank has reportedly raised its quarterly international spending limit to $50,000, while Guaranty Trust Holding Company (GTCO) has increased its allowance to $40,000 per quarter.

Zenith Bank provides an annual international transaction limit of up to $50,000 on its naira cards, while Access Bank operates varying limits across its card categories.

The differences in spending allowances reflect the individual foreign exchange liquidity positions and funding capacities of the banks.

Financial experts explain that commercial banks depend on several channels, including export proceeds, diaspora remittances and interbank transactions, to meet customers’ foreign currency requirements.

Despite the encouraging figures, concerns persist over the sustainability of Nigeria’s foreign exchange recovery, particularly its exposure to short-term foreign portfolio investments.

Unlike foreign direct investment, portfolio capital can move quickly across markets in response to changing global interest rates, economic uncertainties and investor sentiment. A sudden reversal could therefore put renewed pressure on the country’s external reserves and exchange rate stability.

The International Monetary Fund (IMF) has also highlighted the vulnerabilities associated with excessive dependence on volatile capital flows, reinforcing the need for stronger and more sustainable sources of foreign exchange earnings.

Consequently, expanding non-oil exports, attracting long-term foreign direct investment, strengthening domestic manufacturing and improving local production capacity remain critical to consolidating the gains.

For Nigerian businesses, improved foreign exchange liquidity offers the prospect of easier access to imported raw materials, machinery and other production inputs. It could also facilitate international payments, improve financial planning, support cross-border trade and strengthen confidence among local and foreign investors.

The broader policy challenge, therefore, is to transform the recent improvement in dollar supply into lasting economic stability by diversifying foreign exchange sources, deepening productive investments and building a more resilient economy.

The rise in net foreign exchange inflows presents a positive signal for Nigeria’s business environment, particularly for import-dependent industries, manufacturers and businesses engaged in international trade. However, the durability of the recovery will depend on the country’s ability to attract long-term investments, increase non-oil export earnings and reduce vulnerability to volatile foreign capital movements.

Edited by Rosemary Aiyenale

Source: BusinessDay