Foreign Currency Inflows into Nigerian Market Soars by 62%
The Nigerian FX market experienced a significant increase in foreign currency inflows in May, supported by a monthly uptick across key segments and sources. According to the data from FMDQ, total inflows into the Nigerian Foreign Exchange Market (NFEM) surged by 62.0% to $5.96 billion in May from $3.67 billion.
The improvement was primarily due to a substantial increase in inflows from both local and foreign sources. FX data reviewed revealed that dollar inflows from local sources accounted for aggregate inflows in the forex market, while foreign investors contributed 16.8% at the same time.
Specifically, inflows from local sources rose to a six-year high, up by 64.2% month on month to $4.96 billion in May from $3.02 billion in April, Cordros Capital Limited stated in a note. The significant surge was driven by an increase in inflows from exporters/importers, non-bank corporates, and individuals.
The volume of US dollars that flowed into the FX market from exporters increased sharply to $3.11 billion last month, from $655.70 million in April. Non-bank corporates also reported a surge in FX inflows, settling at $1.11 billion in May from $1 billion recorded in the month of April. Inflows from individuals increased to $91.4 million from $15.1 million in the preceding month.
According to the report, FX inflows from the Central Bank of Nigeria eased in May, settling at $649.80 million, a sharp monthly reduction when compared with $1.35 billion contributed in April.
In the same period, inflows from foreign sources increased by 51.7% month on month to $997.60 million from $657.40 million in April—the highest level in three months—supported by increased market confidence amid the uncertainty in the global space, Cordros Capital Limited said.
Foreign portfolio investors US dollar inflows climbed by 61.3% to $880 million, and other corporate inflows inched higher by 10% to $83.9 million last month. Meanwhile, inflow from foreign direct investment fell by -6.3% month on month to $32.9 million.
“In the near term, we anticipate that foreign exchange inflows will continue to improve, supported by growing market confidence.
“However, the lingering global trade uncertainties remain a downside risk to robust inflows from the foreign counterparts, potentially constraining growth in overall FX liquidity”, Cordros Capital Limited stated. #Foreign Currency Inflows into Nigerian Market Soars by 62% Alleged $12m Fraud- Court Fixes Date for SunTrust Bank’s MD Arraignment
