Dollar trading in Nigeria's foreign exchange market fell by more than half in the first week of November, dropping 51.29% to $1.81 billion in the week ended Nov. 6 from $3.71 billion a week earlier, according to FMDQ data on transactions between authorized dealers and their customers reported by Nairametrics. The naira barely moved, closing the week at 1,349 per dollar.

The slump in volume is the steepest weekly decline of 2026, deeper than the 46.57% fall recorded in the week ended July 10. For investors in Asia with exposure to Nigerian bonds, banks or consumer companies, the combination matters: a stable currency on thin turnover, and a banking system flush with naira that the central bank is still trying to drain, ahead of a Monetary Policy Committee decision later this month.

Naira steady as turnover dries up

Average daily turnover dropped to $361.67 million from $742.51 million, the FMDQ figures showed. Spot transactions, which settle almost immediately, accounted for nearly all of the fall, sliding 50.91% to $1.79 billion. Forward contracts executed during the week shrank 69.93% to $22.20 million, cutting their share of total turnover to 1.23% from 1.99%.

The currency weakened about 0.1% on the week, despite a $50 million intervention by the Central Bank of Nigeria. Separate CBN data on the Nigerian Foreign Exchange Market showed the naira moving from 1,346.01 per dollar on Nov. 2 to 1,349 on Nov. 6, a decline of 0.22% over the week, with reported turnover of about $1.45 billion from Nov. 2 to Nov. 5. Nairametrics said the CBN had not yet published the Nov. 6 total when it filed its report.

The moves are small next to October's swings. The naira was at 1,329.50 per dollar at the end of September and about 1,346 by Oct. 30, according to Nairametrics, which described October turnover as unusually high.

Reserves give the central bank room. Gross external reserves rose by $295.35 million in October, the smallest monthly increase this year, while net reserves reached a record $46 billion, up from $34.80 billion at the end of 2025, Nairametrics reported.

Analysts expect the naira to stay broadly stable in the near term. Cordros Securities based that view on the reserve position and a continuing current account surplus, but cautioned that lower domestic yields or tighter global financial conditions could slow portfolio inflows. Cowry Asset Management pointed to persistent dollar demand, seasonal payment obligations and crude oil prices as factors that could cap any appreciation.

Central Bank of Nigeria mops up, banks keep cash parked

Liquidity in the banking system moved the other way. Banks placed 8.311 trillion naira at the CBN's Standing Deposit Facility on Nov. 6, up 347.44 billion naira from the previous day and 1.345 trillion naira, or 19.30%, from Nov. 4, according to central bank data analyzed by Nairametrics.

That was despite an open market operations auction on Friday, Nov. 6, at which the CBN offered 1 trillion naira of bills, split equally between 179-day and 270-day maturities. Bids totaled 1.887 trillion naira, but the bank allotted only 724.32 billion naira, accepting 38.37% of the bids. True yields on both bills were about 18.84%. No OMO bills matured that day, so the sale was a fresh drain rather than a rollover.

The Nov. 6 sale was roughly a quarter of the size of the CBN's Nov. 3 operation, when it allotted about 2.95 trillion naira. Banks' opening balances, meanwhile, fell 68.29% between Nov. 4 and Nov. 6 as lenders shifted cash into the deposit facility.

More cash is on the way. The Financial Markets Dealers Association projects about 13.79 trillion naira of inflows in November, mainly from OMO maturities, federal revenue allocations and Treasury bill repayments. For the week starting Nov. 9, Treasury bill maturities of 148.57 billion naira and OMO maturities of 774.53 billion naira are due, about 923.10 billion naira combined.

Policy rate decision in focus

The central bank cut its monetary policy rate to 23% from 26.5% at its Sept. 22 meeting, The Asian Banker reported. The CBN said the move reset a benchmark that had drifted away from market rates and weakened transmission, and that its underlying stance was unchanged. It left cash reserve requirements at 45% for commercial banks and 16% for merchant banks, and set its standing facilities corridor at 50 basis points above and 300 basis points below the policy rate.

Traders now turn to Nigeria's next inflation report and the Monetary Policy Committee's interest rate decision later in November. Whether the CBN continues to allot well below subscription levels, or steps up sales to match the 13.79 trillion naira of expected inflows, will shape short-term yields and the naira into the year-end import season.