FX Inflows into Nigerian Currency Market Falls by 24%
Foreign exchange (FX) inflows into the Nigerian currency market fell by 24% to $1.01 billion last week in the absence of significant open market operations action by the Central Bank.
Elevated OMO bills yields have been a key attraction that has driven foreign portfolio investors into the Nigerian market with a bucket of hot money.
Still, the forex market appeared liquid enough to weather the storm against sustained demand for US dollar. According to an update released by Coronation Merchant Bank’s research subsidiary, total foreign exchange inflows through the Nigerian Foreign Exchange Market (NFEM) slowed.
Aggregate FX supply printed at US$1.04 billion last week, down from US$1.37 billion. The bank said foreign portfolio investors (FPIs) accounted for 62.3%, or US$645.40 million, of total inflows.
This was followed by contributions from exporters (15.0%), non-bank corporates (11.6%), the FDIs (1.9%), and other sources (9.2%). The Apex Bank conducted an OMO action at the close of the week, offering a total of N600 billion across the 46 day and 60 day tenors.
Total subscription printed at N359.18bn, but allotment was limited to the longer-dated bill at N1.1 billion. Despite the low allotment, stop rates rose to 21.70%, compared to the 19.84% seen at the previous auction. GCR Downgrades Dangote Industries Ratings, Outlook Evolving
