Naira's Record FX Turnover Hides Deeper Market Concerns - Dele Oye

The recent record-breaking foreign exchange turnover of $4.4 billion in one week has been met with caution by Hon. Dele Oye, Chairman of the Alliance for Economic Research and Ethics. According to Oye, this historic trading volume should not be seen as a sign of strength in the currency market, but rather as an indication of its underlying fragility. In a statement, Oye noted that while the market's ability to process large transactions is a positive development, it does not necessarily translate to a deeper, more liquid, or resilient foreign exchange market. The $4.375 billion combined spot and derivatives turnover in the week ended July 24, 2026, represents an 83.38 per cent increase from the previous week, but Oye warned that unusually high trading volumes do not automatically mean stronger liquidity, improved reserves, or wider access to foreign exchange. Oye pointed out that the sharp volatility in recent weekly turnover figures, which ranged from $1.631 billion to $4.375 billion, suggests that the market is not as stable as it seems. He also highlighted a significant increase in forward contracts, which jumped by 333.59 per cent to $62.87 million, indicating a growing demand by market participants to hedge against future exchange rate uncertainty. Furthermore, Oye expressed concern over the creeping dollarisation of the economy, citing the recent decision by Dangote Petroleum Refinery to price petrol, diesel, and aviation fuel in dollars as an example of how the actions of a few dominant firms can send shockwaves through the foreign exchange market. Oye urged the Central Bank of Nigeria and FMDQ to improve transparency by providing more detailed information on major foreign exchange transactions, which he believes would reduce speculation and strengthen investor confidence. He also called on the government to focus on attracting long-term investments into key sectors such as agriculture, manufacturing, technology, and infrastructure, rather than relying on volatile portfolio inflows. Ultimately, Oye argued that the true test of a healthy foreign exchange market is not a single record-breaking trading week, but its ability to provide transparent price discovery, credible hedging, and stable access to foreign exchange for businesses and investors.