Total inflows into the foreign exchange (forex) market rose by about 42 per cent last month to hit $3.7 billion, its highest level in the past five years
This is as domestic and foreign investors continued to react positively to the nation’s macro-economic
Autonomous Foreign Exchange Market (NAFEM) at the weekend showed that the forex inflows has sustained double-digit growth .
The naira also continued its rally.
NAFEM data, obtained from the FMDQ, showed that inflows rose by 41.7 per cent which translates to moving from $2.64 billion in February to $3.75 billion last month, the highest level since March 2019.
The upsurge was driven by significant increase in supplies from both domestic and foreign sources. The rally was notably driven by non-government sources, with less inflows from the Central Bank of Nigeria (CBN).
A breakdown showed that domestic sources accounted for 59 per cent of total transactions while foreign sources contributed 41 per cent.
Notably, inflows from foreign sources jumped by 39.6 per cent from $1.10 billion in February 202 to $1.54 billion last month.
Inflows from local sources increased by 43.2 per cent from $1.54 billion in February to $2.21 billion last month,, with double digit growths across the non-CBN sources.
While inflow from the CBN dropped by 65.7 per cent, inflows from individual domestic sources quadrupled by 405.8 percent, non-bank corporate sources rose by 157.7 percent while inflows from exporters grew by 14.6 percent.
With these, average total monthly inflows into the NAFEM in first quarter of this year stood at $2.47 billion, representing an increase of 84.3 percent and 126.6 percent on monthly average of $1.34 billion and $1.09 billion recorded in first and fourth quarters of last year.
The naira continued its rally with 4.7 percent gain to close weekend at N1,251.05 per dollar. In the forwards market, naira appreciated across all tenors.
The one-month forwards appreciated by 4.4 per cent to N1,277.79 per dollar, three-month forwards rose by 5.5 percent to N1,302.91 per dollar, six-month forwards improved by 5.7 percent to N1,360.09 per dollar while the one-year contracts rallied by 4.2 percent to N1,479.02 per dollar.
The appreciation at the forwards market underlined a near consensus among analysts, projecting a stable and resilient naira going forward.
However, the nation’s forex reserves, which had gained $1.04 billion to close first quarter at $33.952 billion, dropped to $33.51 billion at the weekend.
