See why Nigeria recorded high dollar supply in the FX market

• 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 has jumped.

According to apex bank in its latest monthly economic report said that Nigerian economy recorded $8.86 billion in Forex inflows in February 2024.

Forex scarcity is one of the challenges facing naira Photo credit: CBN
Source: Facebook

The figure represents a 57% increase when compared to $5.66 billion in the corresponding period of February 2023.

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Analysts always believe that improved liquidity in the market will spur appreciation of the naira and crash the value of naira in the official and unofficial markets.

Forex inflow into Nigeria

The CBN data also showed that foreign exchange turnover increased by 180% year-on-year to $240.64 million in February 2024, compared to $85.80 million recorded in February 2023.

BusinessDay reports that inflows through the CBN rose by 29% to $3.26 billion in February 2024 as against $2.53 billion in the corresponding period of February 2023.

While on a month-on-month basis, aggregate inflows into the Nigerian economy increased by 80 percent to $8.86 billion, compared with $4.91 billion reported in the preceding month.

Furthermore the report showed that Inflows through the central bank rose by 128% to $3.26 billion, from $1.43 billion in the preceding month.

While, autonomous inflows rose by 61% to $5.60 billion, from $3.48 billion.

The CBN report also noted that new investments into the economy increased significantly to $1.24 billion, compared with $0.33 billion in January 2024.

CBN stops BDC funding

Earlier, Legit.ng reported that the CBN reportedly stopped funding for Bureau de Change Operators.

The move aims to test CBN’s reform template and minimise quick fixes in the FX market.

The CBN is reportedly reviewing significant policies to strengthen the implementation or tweak its reforms.

Source: Legit.ng