Nigeria recorded a strong increase in foreign exchange inflows in May 2026, with total inflows rising by 31 percent to $3.7 billion. The growth was driven mainly by improved domestic liquidity, higher export earnings, and continued support from the Central Bank of Nigeria (CBN), helping to strengthen the naira against major foreign currencies.
According to data from the FMDQ Exchange, the increase represents a significant recovery after two straight months of declining forex inflows. The improvement came despite ongoing global economic uncertainty caused by rising tensions in the Middle East.
Although the monthly figures showed strong growth, foreign exchange inflows were still lower than the level recorded in May 2025. Compared to the same period last year, total inflows fell by 44 percent, reflecting continued concerns among foreign investors and liquidity challenges affecting many emerging economies.
Domestic sources played the biggest role in boosting forex supply during the month. Local inflows increased to approximately $2.1 billion, up from $1.2 billion in April, accounting for about 56 percent of the total foreign exchange entering the market.
Export proceeds were the major contributor to this growth. Earnings from exporters more than doubled, rising by 107 percent to $1.4 billion in May. This represented nearly 68 percent of all domestic forex inflows during the period.
Financial analysts attributed the surge largely to stronger oil export earnings. Higher global crude oil prices, influenced by supply concerns linked to the Middle East conflict, helped Nigeria generate increased revenue from crude exports.
The Central Bank also contributed to market stability through forex interventions. The apex bank sold about $125 million into the market in May, compared to $104 million in April, helping to improve liquidity and ease pressure on the local currency.
Other domestic sources also recorded improvements. Corporate forex inflows rose to $520 million from $415 million in April, while inflows from individuals stood at $13.8 million.
Foreign inflows remained relatively stable despite global market challenges. Total foreign inflows increased slightly to $1.7 billion from $1.6 billion recorded in April. Foreign Portfolio Investments (FPIs) remained the dominant source of external funds, accounting for about 98 percent of foreign inflows.
FPI inflows rose to $1.62 billion in May, compared to $1.57 billion in April. Most of these investments were directed toward fixed-income securities, which attracted approximately $1.55 billion during the month.
The stronger inflows helped support the naira. Data from the CBN showed that the currency appreciated by 0.22 percent at the official market, closing May at N1,372 per dollar. The naira also strengthened at the parallel market, gaining 0.6 percent to close at N1,390 per dollar.
This improvement narrowed the gap between the official and unofficial exchange rates, boosting confidence among investors and market participants.
Nigeria’s external reserves also recovered, rising to $49.6 billion after declining for two consecutive months. The earlier reduction was linked mainly to external debt servicing obligations.
Looking ahead, analysts remain optimistic about the outlook for the naira. They believe that continued export earnings, stable foreign investments, healthy market liquidity, and reduced import demand could help maintain exchange rate stability in the coming months.
