CBN Explains Sources of $2.33bn Into Economy as Currency Dealers Sell Dollar at New Rates

• The Central Bank of Nigeria (CBN) has revealed that International Money Transfer Operators (IMTOs) played crucial roles in FX inflows into the economy
• The bank disclosed that forex inflow into the economy is up 47% to $2.33 billion in the first six months of this year
• The CBN data shows that Nigeria’s FX inflows rose by 67.8% to $27.6 billion in the first half of this year compared to $16.44 billion in 2023

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Information from the Central Bank of Nigeria (CBN) disclosed that foreign exchange inflows via International Money Transfer Operators (IMTOs) rose by 47% to $2.33 billion in the first six months of this year relative to the $1.58 billion recorded in 2023.

The development comes amid CBN policies allowing eligible IMTOs to access naira liquidity at the official forex window.

Read also

BDC reports changes in exchange rate as naira loses to dollar in parallel market

The role of IMTOs in FX inflows

Recently, the apex bank released some measures to boost the FX markets and increase remittance inflows via formal channels.

According to a circular signed by CBN’s Director of Trade and Exchange Department, W.J. Kanya, the bank disclosed that the measures would enable the IMTOs to access naira liquidity at the official market, thereby boosting the timely settlements of diaspora remittances.

The circular disclosed that the eligible IMTOs can access the CBN window directly or via their authorised dealer banks to execute transactions for foreign exchange sales.

CBN data shows that Nigeria’s FX inflows rose by 67.8% to $27.6 billion in the first half of this year compared to $16.44 billion in 2023.

CBN’s quarterly data shows that the development was due to a 34% increase in net inflows via autonomous sources and a 170% increase in net FX inflow via the apex bank in the same period.

Read also

“No more 32.15%:” Nigeria’s inflation rate accelerates to new high amid hike in petrol prices

Dollar inflow into Nigeria hits new high

The inflow into the economy rose 41.6% in the review period to $47.73 billion in the first half of 2024 from $33.7 billion recorded in the same period in 2023.

Gross FX inflows via autonomous means also rose by 47.6% yearly to $31.15 billion in the first six months of 2024 from $21.16 billion in the same period last year.

The development comes amid the crash of the US dollar in the parallel market on Tuesday, October 15, 2024.

The naira appreciates in the parallel market

Legit.ng reported that the Nigerian naira appreciated N1,660 per dollar in the parallel market on Tuesday, October 15, 2024. 

Traders who spoke to Legit.ng on Tuesday confirmed the new exchange rate and said it is a massive improvement. 

The naira also improved in the official market. Data from FMDQ showed that the exchange rate for NAFEM rose to N1,552.92 per dollar from N1,641.27 per dollar on Friday last week, indicating an appreciation of N88.35.

Read also

Nigeria faces N9.41bn power debt as Benin, Niger, Togo struggle with payments

However, the margin between the parallel market and the NAFEM rate is still extensive at over N100. 

Expert predicts new exchange rates

Legit.ng earlier reported that the Nigerian currency, the naira, appreciated 5.38% in the official Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, October 14, 2024.

The local currency traded at N1,552.92 per dollar, up from N1,641 per dollar on Friday, October 11, 2024, an N89 gain in the official market.

Data from the FMDQ Exchange shows that currency dealers in the official market quoted the US dollar at a high of N1,682 per dollar and a low of N1,540.

Source: Legit.ng