Dollar inflow through CBN rose by 91.9% as FX pressure intensify

Dollar inflow through the Central Bank of Nigeria (CBN), rose substantially, by 91.9 percent, to US$2.59 billion in July 2023, compared to US$1.35 billion recorded in June 2023, the apex bank report indicated.

Nigeria’s Central Bank receives foreign exchange inflows from crude oil sales and other revenue sources on the government’s behalf.

According to the CBN’s monthly economic report, outflow through the Bank increased by 43.8 per cent to US$2.80 billion, from US$1.95 billion recorded in June 2023.

Sectoral utilisation of foreign exchange for visible import showed that industry had the largest share of 68.4 percent, followed by manufactured products (20.6%), food products (4.7%), transport (3.9%), oil (2.2%), and agriculture (0.2%).

Autonomous inflow decreased by 14.3 per cent to US$3.58 billion from US$4.18 billion in the previous month. Autonomous outflow also declined by 3.5 per cent to US$0.36 billion, from US$0.37 billion in June 2023.

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A net inflow of US$3.23 billion from autonomous sources was recorded, compared with US$3.82 billion in June 2023, while the Bank recorded a net outflow of US$0.22 billion, compared with US$0.60 billion in the preceding month. Consequently, the economy recorded an overall net foreign exchange inflow of US$3.01 billion in July 2023.

The economy recorded a net foreign exchange inflow of US$3.01 billion in July 2023. Aggregate foreign exchange inflow into the economy rose by 11.6 per cent, to US$6.17 billion, from US$5.53 billion in the preceding month. Foreign exchange outflow also increased by 36.2 per cent to US$3.16 billion from US$2.32 billion in June 2023.

At the Nigerian Autonomous Foreign Exchange (NAFEM), the naira depreciated relative to the US dollar during the review period. The average exchange rate of the naira per US dollar at the market depreciated by 20.7 per cent to N770.32/US$, from N610.71/US$ in June 2023.

The average foreign exchange turnover at the NAFEM decreased by 47.6 per cent to US$82.48 million in July 2023, compared with US$157.40 million in June 2023.

NAFEM is the market trading segment for Investors, Exporters and End-users that allows for FX trades to be made at exchange rates determined based on prevailing market circumstances, thus ensuring efficient and effective price discovery in the Nigerian FX market.