More foreign currency entered the economy in the past one year as the net foreign exchange (FX) surged by 245.9 per cent.
Data from the Central Bank of Nigeria (CBN)’s economic report showed that the net FX flows through the economy rose to $5.95 billion as of November 2024 compared to $1.7 billion in the corresponding period of November 2023.
The net FX flow is the difference between the total inflows and outflows of foreign exchange. A positive net FX flow indicates that more foreign currency is entering the economy than leaving, which can strengthen the country’s foreign reserves and exchange rate.
Nigeria’s external reserves rose in the review month and were above the international benchmark of three months of import cover. The international reserves rose to US$40.38 billion at the end of November 2024, from US$39.71 billion at the end of October 2024. The position could cover 9.16 months of import for goods and services or 13.71 months for goods only.
On a monthly basis, the economy recorded a lower net foreign exchange inflow in November 2024, on account of decline in inflow through the Bank. Foreign exchange flows through the economy amounted to a net inflow of US$5.95 billion, relative to US$4.86 billion in October 2024.
Aggregate foreign exchange inflow declined to US$8.40 billion, from US$9.15 billion in the preceding month. Similarly, foreign exchange outflow decreased to US$2.45 billion, from US$4.29 billion in the preceding month.
Foreign exchange inflow through the Bank declined to US$2.91 billion, from US$4.48 billion in the preceding month, while autonomous inflow increased to US$5.49 billion, from US$4.67 billion in the preceding month. Outflow through the Bank fell to US$2.09 billion, from US$3.73 billion in the preceding month, while autonomous outflow fell to US$0.36 billion, from US$0.56 billion in October 2024.
Consequently, the Bank recorded a net inflow of US$0.82 billion, compared with US$0.75 billion in October 2024, while a net inflow of US$5.13 billion was recorded through autonomous sources, relative to US$4.11 billion in the preceding month.
The naira depreciated against the US dollar at the Nigerian foreign exchange market during the review period.
The average exchange rate of the naira per US dollar at the Nigerian foreign exchange market (NFEM) depreciated by 1.78 per cent to N1,670.78/US$, from N1,641.12/US$ in the preceding month.
Conversely, at the end of the period NFEM rate appreciated by 0.39 per cent to N1,663.90/US$, from N1,670.47/$ at the end of October 2024.
The average foreign exchange turnover at the NFEM rose by 24.78 per cent to US$301.52 million, from US$241.65 million in October 2024, due to increased activity in the window.
