Nigeria records 5% boost in net foreign exchange inflows to $25.4bn in H1 2024

Business a.m.

The Central Bank of Nigeria (CBN) has confirmed that the total net foreign exchange inflows into the country rose 55 percent year-on-year to $25.4 billion during the first six months of 2024.

The CBN, in a statement obtained by Business a.m., indicated that its policy objectives are achieving visible and promising results, resulting in a notable boost in market confidence. This was corroborated by the significant growth in net foreign exchange inflows, largely attributed to a notable increase in capital importation, which reached an unprecedented $6 billion in June 2024, along with unprecedented inflows from the diaspora via formal remittance channels.

“In the latest testament to the Central Bank of Nigeria’s (CBN) ongoing commitment to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary, the apex bank offered $876m to fulfil bids submitted by customers at an auction concluded on Wednesday, August 7, 2024.

“In line with its pledge to provide transparent access to foreign exchange for all legitimate customers, the CBN’s leadership has introduced an additional mechanism through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users.

“This approach aims to foster a more transparent market, reducing information asymmetry and supporting price discovery. It complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of foreign exchange has been sold to authorised dealers in the last three weeks,” the statement read in part. 

In the CBN’s assessment, the foreign exchange market is demonstrating steady improvement and expanding depth, driven by a wider variety of robust and diversified sources of liquidity, which has led to the sustained convergence of exchange rates across all segments of the market. 

This was reflected in the official market turnover, which amounted to a staggering $43 billion in customer transactions by the end of July 2024, with the CBN-supplied liquidity representing a meager five percent of total market activities

Reaffirming its commitment to the development of a robust, transparent, and market-driven foreign exchange market, the CBN stated that it will persist in its efforts to boost the market’s capacity to cater to the legitimate needs of all participants.