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The Central Bank of Nigeria (CBN) has announced a notable surge in foreign exchange inflow into the economy throughout February 2024.
This increase is credited to substantial remittance payments from Nigerians residing overseas and the acquisition of naira assets by foreign portfolio investors.
Mrs. Hakama Sidi Ali, the apex bank’s Acting Director of Corporate Communications, disclosed this information in a statement provided to the media. According to Sidi, the Bank’s data reveals that overseas remittances escalated to US$1.3 billion in February 2024, marking a fourfold increase from the US$300 million received in January.
Additionally, Sidi stated that foreign investors procured over US$1 billion worth of Nigerian assets last month. This surge brings the total portfolio flows for 2024 to at least US$2.3 billion, compared to the US$3.9 billion recorded for the entirety of last year.
Sidi further highlighted that the trend of higher FX inflows persisted into March 2024. This was propelled by heightened investor interest in short-term sovereign debt following recent adjustments to benchmark interest rates. Notably, Government securities issuances witnessed significant oversubscription, with foreign investors contributing to over 75% of bids received at auctions held on March 1 and 6, 2024.
Recalling the recent Monetary Policy Committee meeting and a conference call with foreign portfolio investors, Sidi noted that CBN Governor, Mr. Olayemi Cardoso, outlined a comprehensive strategy aimed at curbing inflation, stabilising the exchange rate, and bolstering confidence in both the banking system and the economy.
This strategy aims for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.
“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” Governor Cardoso said.
“When people understand the real issues and see a strategy and a plan, things tend to calm down. Our objective today is to ensure that the market has supply, that the market functions, and that investors can come in and go out,” he noted.
