Nigeria recorded a major drop in foreign exchange inflows in June 2026, with total funds entering the Nigerian Foreign Exchange Market (NFEM) falling by 20.7 percent compared to the previous month. The decline has raised concerns about reduced market liquidity as both local and foreign investors brought in less foreign currency.
According to the latest figures released by the Financial Markets Dealers Quotations (FMDQ), total foreign exchange inflows dropped to $3.31 billion in June, down from $4.17 billion recorded in May. The decrease was mainly linked to weaker participation from exporters, importers, companies, the Central Bank of Nigeria (CBN), and foreign portfolio investors.
Domestic inflows were among the hardest hit during the month. They made up 48.9 percent of the total inflows but fell by 30.1 percent, dropping from $2.32 billion in May to $1.62 billion in June.
The biggest decline came from exporters and importers, whose foreign exchange inflows dropped by 32.5 percent. Non-bank companies also recorded a 30.5 percent reduction in their contributions to the market. In addition, the Central Bank of Nigeria reduced its foreign exchange inflows by 12.1 percent during the same period.
Despite the overall decline in local inflows, there was one positive development. Foreign exchange inflows from individuals increased significantly by 70 percent compared to May. This increase helped reduce the impact of the broader slowdown in domestic foreign currency supply.
Foreign inflows also declined during the month, although the drop was less severe than that of local sources. They accounted for 51.1 percent of the total market inflows but fell by 9 percent, decreasing from $1.86 billion in May to $1.69 billion in June.
The reduction was mainly caused by weaker foreign portfolio investment (FPI), as fewer international investors invested in Nigerian financial assets. FPI inflows declined by 13.9 percent during the month, making it the biggest reason for the drop in foreign inflows.
However, not every foreign investment category performed poorly. Foreign direct investment (FDI), which represents long-term investments in businesses and projects, increased by 37.8 percent in June. Investments from other foreign corporate investors also recorded an impressive rise of 324.9 percent.
Even with these gains, they were not enough to make up for the sharp decline in foreign portfolio investments, which continue to play a major role in Nigeria’s foreign exchange market.
A closer look at portfolio investments showed that fixed-income investments, such as government and corporate bonds, dropped by 16.3 percent during the month. On the other hand, equity investments performed better, recording a 43.8 percent increase. Unfortunately, the growth in stock market investments could not fully offset the weakness in fixed-income inflows.
The June figures highlight the challenges facing Nigeria’s foreign exchange market as lower inflows from key domestic and international sources continue to reduce the amount of foreign currency available in the economy. Market observers will be watching closely to see whether investment inflows improve in the coming months.
