Nigeria’s economy witnessed a significant boost in foreign exchange inflows during the first half of 2024, with net inflows rising by 67.8% year-over-year (YoY) to $27.6 billion.
The increase was primarily driven by a surge in autonomous inflows and a turnaround in Central Bank of Nigeria (CBN) interventions.
According to data from the CBN, net inflows through autonomous sources rose by 34.6% YoY to $25.7 billion, while net forex inflow through the CBN increased by a substantial 170% to $1.86 billion.
Overall forex inflows to the economy grew by 41.6% YoY to $47.73 billion in H1’24. However, forex outflows also rose by 16.3% to $20.12 billion, resulting in a net inflow of $27.6 billion.
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The CBN attributed the increase in inflows to recent measures aimed at improving the efficiency of the forex market and encouraging remittance flows through formal channels.
These measures included allowing eligible International Money Transfer Operators (IMTOs) to access naira liquidity at the official window, which led to a 47% YoY increase in IMTO inflows to $2.33 billion.
Nigeria’s forex market is expected to remain dynamic as the CBN continues implementing reforms aimed at improving liquidity and bolstering inflows from both autonomous sources and remittances.
However, the rise in outflows presents challenges, and the balance between inflows and outflows will be critical in maintaining currency stability.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
