The Central Bank of Nigeria (CBN) has announced a significant increase in foreign exchange (FX) inflow into the country’s economy for the month of February 2024.
The surge, attributed to higher remittance payments by Nigerians living abroad and increased purchases of naira-denominated assets by foreign portfolio investors, marks a notable boost to Nigeria’s FX reserves.
According to Mrs. Hakama Sidi Ali, the Acting Director of Corporate Communications at the CBN, overseas remittances surged to US$1.3 billion in February 2024, representing more than a fourfold increase from the US$300 million received in January.
“Foreign investors purchased more than US$1 billion of Nigerian assets last month, with total portfolio flows of at least US$2.3 billion recorded thus far in 2024 compared to US$ 3.9 billion seen in total for last year,” she added.
Mrs. Ali further disclosed that the trend of higher FX inflows continued into March 2024, fueled 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 accounting for over 75% of bids received at auctions conducted on March 1 and 6, 2024.
The surge in FX inflows follows a comprehensive strategy outlined by Mr. Olayemi Cardoso, the CBN Governor, during last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors.
Governor Cardoso emphasized measures aimed at curbing inflation, stabilizing the exchange rate, and fostering confidence in the banking system and economy.
Reflecting on the positive developments, Governor Cardoso expressed optimism, stating, “All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off.
“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.
