FX Inflow to Investors, Exporters Window Rises by 49%

FX Inflow to Investors, Exporters Window Rises by 49%

There was a strong increase in foreign currency inflows into the Investors and Exporters FX window in the month of September, according to data obtained from FMDQ cited by a number of investment firms.

The strong accretion into the organised foreign exchange (forex) market was supported majorly by higher US dollar inflows from non-corporate players, analysts said in a note. 

In September, the total inflows into the window jumped to a 3-month high, increasing by 49.1% month on month to USD1.31 billion, Cordros Capital said in a report. Analysts said this was above USD881.40 million reported in the month of August, according to the data obtained from the FMDQ. 

The breakdown provided showed that the local inflows primarily drove the increase amid a decline in inflows from foreign sources.

It was specifically noted that local inflows increased by 55.2% month on month to USD1.26 billion from USD810.80 million in August, a surge that was supported by higher inflows from non-bank corporates which surged by 89.3% and 49.7% growth from exporters. 

Meanwhile, given that foreign investors remained cautious about returning in droves despite the significant currency depreciation since June, foreign inflows dipped by 20.5% in September to USD44.60 million.

Looking ahead, the investment firm expects FX liquidity conditions to remain frail in the near term as the Nigerian naira reform momentum has slowed considerably. Naira Devaluation Deepens Economic Crisis in Nigeria

“We also anticipate weak foreign inflows in the short term, as foreign investors will likely adopt a wait-and-see approach in the near term as they await the CBN’s actions in clearing its FX backlogs and the direction of short-term interest rates amid high inflation”, Cordros Capital said. #FX Inflow to Investors, Exporters Window Rises by 49%