The members of the Central Bank of Nigeria’s, CBN, Monetary Policy Committee, MPC, have called on the apex bank to carry out a comprehensive review of the foreign exchange market operations in the country to determine the fundamental drivers, and relative sizes of the segments of the market.
Nigeria’s Net foreign exchange inflow fell year-on-year (YoY) by 30 per cent to $2.69 billion in October last year from $3.87 billion in the corresponding period of 2020.
The latest Monthly Economic Outlook report of the Central Bank of Nigeria, CBN, indicated that the decline in net inflow was driven by a massive rise in forex outflow during the period.
According to the apex bank, forex inflow rose YoY by 8.1 per cent YoY to $7 billion during the month 2021, while outflow rose YoY by 53 per cent to $4 billion in October 2021 from $2.6 billion in 2020.
The report stated: “Foreign exchange flow through the economy dwindled in October. Aggregate foreign exchange inflow into the economy was $7 billion, in October 2021, compared with $13.38 billion in September 2021.
“The difference between the levels in October and the preceding month was mainly accounted for by the debt proceeds of Eurobonds, which boosted receipts in September 2021.
“However, foreign exchange outflow through the economy increased by 32.3 per cent to $4.31 billion in October 2021. Outflow through the Bank increased by 45.6 per cent, relative to September (mainly third-party MDA transfers and interbank sales). “On the other hand, autonomous outflow declined by 7.2 per cent to $0.76 billion, on account of the decrease in invisible imports.
“Consequently, the economy recorded a net inflow of $2.69 billion in the review period.”