Nigeria’s net foreign exchange inflows fell by 2.97% in the third quarter of 2024, totaling $14.46 billion, down from $14.89 billion in the previous quarter, according to the Central Bank of Nigeria’s latest report.
Despite the quarterly decrease, the country experienced a robust 75.91% year-on-year increase, with inflows up from $8.22 billion in Q3 2023.
Overall foreign exchange inflows for Q3 rose by 3.01%, reaching $22.89 billion, compared to $22.22 billion in Q2.
The report highlights a shift in the composition of inflows, with official sources showing growth, while autonomous sources have seen a decline.
The report said, “Inflows through the bank rose by 39.63 per cent to $11.86 billion from $8.49bn, while autonomous sources fell by 19.66 per cent to $11.03bn from $13.72bn in the preceding quarter.
Foreign exchange outflow through the economy rose by 15.18 per cent to $8.43bn, relative to the level in Q2 2024. Outflows through the bank rose by 27.91 per cent to $7.31bn, while those through autonomous sources decreased by 30.06 per cent to $1.12bn.
“Consequently, net foreign exchange inflow through the economy decreased by 2.97 per cent to $14.46bn, from $14.89bn in the preceding quarter.
However, net inflow through autonomous sources fell to $9.90bn from $12.12bn in the preceding quarter.
A net inflow of $4.55bn was recorded through the bank compared with a net outflow of $2.78bn in the preceding quarter.”
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, during a recent meeting with the Senate Committee on Banking, Insurance, and Other Financial Institutions, revealed that diaspora remittances processed through International Money Transfer Operators between January and October 2024 reached $4.22bn.
This figure is nearly double the $2.62bn recorded during the same period in 2023. Cardoso added that on a monthly analysis, remittances increased from $336m in September 2024 to $402m in October 2024.
He attributed this surge to improved efficiency in the remittance system, the favourable effects of President Bola Tinubu’s policies, and the growing trust among Nigerians in the Diaspora to support national development.
Meanwhile, in the same quarter, the average exchange rate at the Nigerian Autonomous Foreign Exchange Market depreciated by 14.62 per cent to N1,588.64/$, from N1,385.96/$ in Q2’2024, owing to increased demand pressure.
Also, the external reserves rose to $39.29bn from $34.76bn at end-September 2024.
This level of reserves could cover 8.91 months of imports for goods and services or 13.34 months for goods only.
In its projections on the domestic economy, the CBN report said, “For the remaining three months in the year 2024, inflation is expected to remain elevated.
This expected rise is on account of the impact of ongoing policy reforms, leading to an increase in both energy and transport costs.
However, the banks’ sustained contractionary stance, the relative stability at the foreign exchange market, as well as the continuous harvest of some food staples could contribute to moderating inflation.
“Fiscal outlook remains bright in the near- to medium-term, as fiscal reforms continue to exert favourable outcomes, evident in contracting fiscal deficits and higher revenue collection.
Nigeria’s inflation as of November stood at 34.60 per cent driven by food and energy costs, reflecting a 0.72 per cent increase from October’s rate of 33.88 per cent.
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