CBN Supplied 30.5% of US Dollar Inflow in FX Market
The Central Bank of Nigeria (CBN) accounted for 30.5% of foreign exchange market U.S dollar inflows in the currency market, helping the naira to rally.
The Apex Bank presence in the currency market continues to influence exchange rate direction, though investors’ confidence remains solid giving the sustained FX intervention.
With the external reserves approaching the fresh high, analysts expressed confidence that the external buffer strengthened the CBN efforts to achieve stable exchange rate.
The apex bank sold OMO bills to foreign portfolio investors last week to attract hard currency into the broader economy. FX inflows at the official window has been on decline, at the same time U.S dollar demand pressure has been minimal, though analysts said they noted intermittent surge.
Last week, the Naira appreciated by 1.10% to close at N1,514.87/US$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM). In the parallel market, the exchange rate remained steady at N1,540.00/US$1, leaving FX spread at N26 on each dollar.
Total FX inflows settled at US$567.2 million, Coronation Merchant Bank research unit said in a Monday note, down from the US$706.7 million recorded in prior week.
Analysts said foreign portfolio investment (FPIs) led with the highest inflows contributing US$184.1 million. Inflows from these offshore investors accounted for 32.5% of the overall inflows in the market last week.
Notably, the CBN intervened in the market accounting for US$173.1 million, which accounted for 30.5% of FX inflows at the official window.
Coronation reported that inflows from Exporters and Non-bank Corporates contributed 16.6% and 16.2%, respectively, while others accounted for 4.3%. #CBN Supplied 30.5% of US Dollar Inflow in FX Market #
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