Foreign exchange inflows into the official forex market have dropped to their lowest level in the past 19 months as investors remain unimpressed by the efforts of the Central Bank of Nigeria (CBN).
Foreign exchange (forex) inflows into the official Investors and Exporters Window (IEW) of the Central Bank of Nigeria (CBN) dropped by 41.2 per cent from $1.15 billion in September 2022 to $676.80 million in October 2022, its lowest level since April 2021.
Inflows from foreign investors had declined for the fourth consecutive month to $72.0 million, the lowest in 19 months, while inflows from domestic investors dropped by 42.5 per cent in October 2022 to $604.80 million.
With the forex pressure unyielding, the naira continued its slide at the official market, dropping by 0.1 per cent to N445.75 per dollar at the weekend. Nigeria’s forex reserves also declined for the 10th consecutive week to close weekend at $37.22 billion.
At the forwards market, the naira also depreciated across all contracts with the one-month contracts dropping by 0.5 per cent to N451.06 per dollar, three-month contracts by 0.5 per cent to N460.71 per dollar, six-month contracts by 0.1 per cent to N476.91 per dollar while one-year contracts declined by 0.2 per cent to N503.46 per dollar.
Cordros Capital, a major investment banking group, attributed the low forex inflows to lack of reforms in the forex framework, higher global interest rates and weak macroeconomic narratives.