Big Boost for Naira As Nigeria’s Foreign Exchange Market Records High Dollar Inflow
- The foreign exchange market has witnessed an increased inflow of dollars, which is a positive sign for the recovery of the naira
- Data from the CBN shows that foreign exchange supply into the country rose by 57% compared to the previous year
- One of the challenges the naira is facing is the demand pressure from Nigerians seeking to import goods or travel abroad
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria has revealed that foreign exchange (FX) inflows into the Nigerian economy have jumped.
According to the apex bank's latest monthly economic report, the Nigerian economy recorded $8.86 billion in Forex inflows in February 2024.
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The figure represents a 57% increase when compared to $5.66 billion in the corresponding period of February 2023.
Analysts always believe that improved liquidity in the market will spur the appreciation of the naira and crash the value of the naira in the official and unofficial markets.
Forex inflow into Nigeria
The CBN report also noted that new economic investments increased significantly to $1.24 billion, compared with $0.33 billion in January 2024.
According to CBN data, foreign exchange turnover surged 180% year-on-year to $240.64 million in February 2024, up from $85.80 million in February 2023.
BusinessDay reports indicate that CBN inflows climbed 29% to $3.26 billion in February 2024, compared to $2.53 billion in February 2023.
Month-on-month, total inflows into Nigeria's economy spiked 80% to $8.86 billion in February 2024, from $4.91 billion in the previous month.
The report further highlighted that CBN inflows soared 128% to $3.26 billion, up from $1.43 billion in the preceding month, while autonomous inflows rose 61% to $5.60 billion from $3.48 billion.
Additionally, the CBN noted a significant increase in new investments to $1.24 billion in February 2024, up from $0.33 billion in January 2024.
CBN issues new directives on street trading
Legit.ng previously reported that the CBN banned street trading of foreign currencies by Bureau de Change (BDC) operators, citing the need to regulate the foreign exchange market properly.
CBN's director of risk management, Blaise Ijebor, said street trading of foreign currencies is not allowed as the apex bank does not want BDCs under trees.
He said the traders should be in offices where customers can come in and change their currencies.
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Source: Legit.ng
