Nigeria's CBN Slashes FX Futures Costs by 91.5%

The Central Bank of Nigeria has cut its spending on naira-settled OTC foreign exchange futures by 91.5 percent in 2025, saving approximately N11.61 billion as the non-deliverable forwards market grinds to a near-complete halt.

The bank's OTC FX futures transaction fee expense fell to N1.08 billion in 2025, down from N12.69 billion in 2024, according to a MoneyCentral report by Bala Augie published on August 8, 2026, and corroborated by Chima Nwokoji in the Nigerian Tribune's Money Market section on August 10. The decline marks the financial culmination of a policy shift that began in late 2023 under Governor Olayemi Cardoso.

Contents

01

The Policy Pivot That Froze the NDF Market

02

FMDQ's Lost Revenue and Its Recovery

03

What the Numbers Signal

The Policy Pivot That Froze the NDF Market

The CBN halted quotation of offer rates for all cleared naira-settled NDF contracts on September 26, 2023, as part of a push toward a market-determined exchange rate. The bank had been the anchor seller of these OTC FX futures since 2016, offering them through the FMDQ platform to help importers, foreign investors, and corporates hedge naira depreciation risk.

Since that decision, the market has effectively collapsed. No new 60-month contracts have been introduced after August 2024, and FMDQ data showed zero trades on cleared USD/NGN NDF contracts throughout all of 2024 and into the first four months of 2025. The cumulative notional value of open cleared NDF contracts stood at just $2 million as of July 2025, a year-on-year decline of 98.81 percent. By December 29, 2025, total open contract value across the NDF curve had shrunk to approximately $1.55 million. The N1.08 billion still paid in 2025 reflects residual clearing charges on legacy contracts winding down, not fresh activity.

FMDQ's Lost Revenue and Its Recovery

The CBN's retreat represents a structural shift for FMDQ Group. In 2020, the central bank accounted for roughly 67 percent of FMDQ's N31 billion total revenue, with the exchange earning N20.82 billion in futures and margin management fees from the CBN, an 86 percent jump from N11.17 billion in 2019.

Yet FMDQ's full-year 2024 results show the exchange has adapted. Total revenue rose 49.9 percent to N51.41 billion, while profit before tax climbed 65.5 percent to N23.23 billion. The FX segment contributed 45 percent of total market turnover, but the growth engine was spot FX, which surged 283 percent year-on-year, more than compensating for the vanishing NDF fee income.

What the Numbers Signal

The 91.5 percent drop in transaction costs reflects a deliberate and sustained policy choice to let market forces drive naira price discovery rather than the central bank quoting and subsidising forward rates.

For market participants who once relied on CBN's OTC FX futures as a predictable hedging tool, the dormant NDF market signals a new era in which forward cover must be sourced from a more liberalised interbank spot and derivatives market.