MORGANABLE MARKETS WATCH
The Central Bank of Nigeria (CBN) sold $1.67 billion in foreign exchange during the first half of 2026, marking its lowest first-half sales in 19 years.
Akure —
The Central Bank of Nigeria (CBN) sold $1.67 billion in foreign exchange during the first half of 2026, marking its lowest first-half sales in 19 years.
The figure fell from $5.41 billion recorded during the same period in 2025. According to the CBN’s quarterly statistical bulletin, sales dropped by 69.03 per cent year on year.
The amount also stood 93.03 per cent below the $24.05 billion recorded in the first half of 2014, when the bank’s sales reached their highest level in the period reviewed.
The latest figures point to a major change in the CBN’s direct role in supplying dollars to Nigeria’s foreign exchange market. However, they do not automatically mean that total dollar inflows have fallen.
PRIVATE INFLOWS GAIN GROUND
Aggregate foreign exchange inflows rose by 12.7 per cent to $63.82 billion in the first half of 2026, from $56.62 billion a year earlier.
Autonomous sources supplied about $45.5 billion of the total, up 18.7 per cent from $38.3 billion in the corresponding period of 2025. These sources include remittances, foreign portfolio investments and non-oil export proceeds.
Autonomous sources therefore accounted for more than 71 per cent of total inflows during the six-month period. This suggests that private-sector channels supplied a larger share of the dollars entering Nigeria.
Nevertheless, the figures do not show that every source of private inflow is stable or will continue at the same pace.
The increase in autonomous inflows was larger than the fall in direct CBN sales. Private inflows rose by about $7.2 billion, while the bank’s sales declined by $3.74 billion.
Although both figures point to a changing market structure, they measure different activities. The increase in private inflows should not be treated as a direct, one-for-one replacement for CBN sales.
SECOND-QUARTER FIGURES SHOW THE SHIFT
Second-quarter data provide further evidence of the change. Autonomous inflows reached $23.31 billion in the three months to June, representing 74.15 per cent of total foreign exchange inflows of $31.43 billion.
Meanwhile, the CBN’s direct sales fell to $418.08 million in the quarter, from about $1.26 billion in the first three months of the year.
The decline means the central bank supplied fewer dollars directly during the second quarter. At the same time, other channels continued to provide substantial foreign currency.
Still, the availability of dollars across the economy does not guarantee that every business or individual can obtain them quickly or at the same cost.
WHAT THE CHANGE MEANS FOR THE NAIRA
A smaller role for direct CBN sales could indicate that the market is becoming less dependent on routine central bank intervention.
If private suppliers continue to provide enough dollars, the bank may have more room to preserve external reserves and intervene when market conditions become disorderly. However, the outcome will depend on how reliable and diverse those inflows remain.
Foreign portfolio investment can bring dollars into Nigeria when investors find local assets attractive. Yet these funds can leave quickly when global interest rates rise, returns weaken or investors become more cautious about emerging markets.
Therefore, a market that depends heavily on short-term capital could face renewed pressure if investor sentiment changes.
BUSINESSES STILL NEED RELIABLE ACCESS
The shift matters to companies that need foreign currency to pay suppliers, import equipment, buy raw materials and settle overseas obligations.
Even when total inflows rise, businesses may face delays or higher costs if demand grows faster than available supply in the channels they use.
Demand for foreign currency also remains substantial. In the second quarter of 2026, total utilisation reached $18.34 billion.
Financial services accounted for $9.64 billion, while import-related transactions represented $5.10 billion. These figures show the range of payments competing for foreign currency, although they do not explain every source of demand.
REFORMS AND MARKET CONFIDENCE
The CBN has introduced changes to improve transparency and the functioning of Nigeria’s foreign exchange market.
These efforts include measures to strengthen price discovery, improve trading practices and build confidence among authorised dealers.
The Electronic Foreign Exchange Matching System, introduced in December 2024, and the Nigerian Foreign Exchange Code, introduced in January 2025, formed part of the wider reform programme.
Lower sales do not necessarily mean the CBN has stopped supporting the naira. The bank may still provide liquidity during sharp disruptions or when foreign currency supply falls short of demand.
Instead, the figures show that direct intervention played a smaller role in the first half of 2026 than it did a year earlier.
OUTLOOK FOR FOREIGN EXCHANGE SUPPLY
The key question is whether private inflows can remain strong enough to support trade, investment and other payments. Sustained supply from exporters, remittances and long-term investors would give the market a firmer foundation than reliance on short-term funds alone.
In contrast, a sudden fall in private inflows could increase pressure on the naira and create uncertainty for businesses.
Market participants will also watch whether higher inflows translate into more predictable access to foreign currency. A stronger supply position can support confidence, but exchange-rate stability also depends on demand, policy credibility and wider economic conditions.
For that reason, the CBN’s sales figures should be assessed alongside reserves, the composition of inflows and market rates.
Overall, the 19-year low in first-half CBN foreign exchange sales marks a significant change in how dollars entered Nigeria’s market during the period.
The rise in autonomous inflows shows that private sources supplied more foreign currency, even as direct central bank sales declined. Whether that shift delivers lasting stability will depend on the strength, diversity and consistency of those inflows in the months ahead.
