Nigeria’s foreign exchange (FX) inflows rose by 3.01% to $22.89 billion in the third quarter of 2024, up from $22.22 billion in the previous quarter, according to the latest Central Bank of Nigeria (CBN) Economic Report.
The report highlighted a significant increase in inflows through the CBN, which surged by 39.63% to $11.86 billion from $8.49 billion in Q2 2024. However, inflows from autonomous sources dropped by 19.66%, declining to $11.03 billion from $13.72 billion.
Foreign exchange outflows also grew, rising by 15.18% to $8.43 billion during the same period. Outflows through the CBN increased sharply by 27.91%, while those from autonomous sources fell by 30.06%. Overall, net inflows for the quarter stood at $14.5 billion.
Analysts at FBNQuest Research Capital attributed the uptick in inflows to the CBN’s efforts to manage FX demand pressures and improve liquidity through strategic interventions.
“The rise in FX inflows is largely due to the CBN’s contractionary monetary policy, which continues to attract offshore capital. The bank’s firm stance on monetary tightening, combined with effective FX supply management, has also limited outflows and bolstered the financial system’s stability,” the analysts noted.
In November, the CBN raised the Monetary Policy Rate by 25 basis points to 25.70% during its Monetary Policy Committee meeting, reinforcing its commitment to controlling inflation while maintaining economic growth.
Meanwhile, Nigeria’s gross official reserves increased to $40.2 billion in November 2024, up from $446.9 million in October. On a year-to-date basis, external reserves have grown by $7.9 billion, reflecting the impact of sustained FX inflows and improved reserve management.
Analysts at CSL Stockbrokers emphasized the need for sustainable foreign exchange sources, including increased crude oil production, foreign direct investment (FDI), and diaspora remittances.
“Diversifying the economy beyond oil revenues is critical to reducing external vulnerabilities. A robust framework for managing foreign reserves will also enhance Nigeria’s financial stability,” they added.
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