Nigeria witnessed forex inflows increase in February

The Central Bank of Nigeria has announced a surge in foreign exchange inflow into the economy during February 2024.

This increase is attributed to substantial growth in remittance payments from Nigerians abroad and heightened interest from foreign portfolio investors in acquiring naira assets.

The Bank’s Acting Director of Corporate Communications Mrs. Sidi Ali, revealed this in a document made available to According Online on Thursday.

Sidi said that overseas remittances reached $1.3bn in February 2024, surpassing the previous month’s inflow of $300m by more than fourfold.

She noted that foreign investors actively participated in the Nigerian market, purchasing over $1bn worth of local assets last month.

Foreign investment outflows from Nigerian stocks rose in November to the highest level in nearly three years despite reforms that spurred a rally in the market last year.

The bank noted that the total portfolio flows for 2024 have already reached $2.3bn, compared to the US$3.9bn recorded for the entire previous years.

The apex bank bank said the trend of higher foreign exchange inflows continued into March 2024, driven by increased investor interest in short-term sovereign debt following adjustments to benchmark interest rates.

Notably, government securities issuances received overwhelming demand, with foreign investors accounting for more than 75 per cent of bids during auctions held on March 1 and 6, 2024.

Recalling recent efforts, CBN Governor, Mr. Olayemi Cardoso outlined a comprehensive strategy aimed at curbing inflation, stabilizing the exchange rate, and instilling confidence in Nigeria’s banking system and economy.

Through last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors, the central bank set expectations for sustained growth in the country’s foreign currency reserves and improved liquidity in the foreign exchange market.

“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off”, Cardoso said.

The document partly reads, “The Central Bank of Nigeria reported a significant increase in foreign exchange inflow into the economy in February 2024, with marked increments in remittance payments by Nigerians overseas and purchases of naira assets by foreign portfolio investors.

“The Bank’s data indicates that overseas remittances rose to $1.3bn in February 2024, more than four times the $300m received in January.

“Foreign investors purchased more than US$1 billion of Nigerian assets last month, with total portfolio flows of at least $2.3bn recorded thus far in 2024 compared to $3.9 billion seen in total for last year.

“When people understand the real issues and see a strategy and a plan, things tend to calm down. Our objective today is to ensure that the market has supply, that the market functions, and that investors can come in and go out.”