Net forex inflow into Nigeria increases by $17 billion in Q2 2024

Nigeria recorded a significant increase in its net foreign exchange (forex) inflows in the second quarter of 2024, marking a notable improvement in the nation’s forex dynamics amidst ongoing currency pressures.

Data from the Central Bank of Nigeria (CBN) reveals that net forex inflow surged by 49.39% to $17.18 billion in Q2 2024, compared to $11.50 billion in the preceding quarter.

This $17 billion rise is due to the impact of increased inflows and reduced outflows across autonomous sources and official channels.

The CBN data shows that foreign exchange inflow through the Nigerian economy totalled $24.55 billion in Q2 2024, up from $22.26 billion in Q1.

This increase was primarily driven by autonomous sources, which accounted for a substantial portion of the inflow. Key details include:

The rise in autonomous inflows particularly highlights the resilience of private sources amidst Nigeria’s forex challenges and indicates increased forex liquidity provided by market-driven sources.

In addition to higher inflows, forex outflows through the Nigerian economy decreased sharply, contributing further to the net inflow increase.

Total outflows dropped by 31.51%, from $10.77 billion in Q1 to $7.37 billion in Q2.

The combined effect of increased inflows and reduced outflows resulted in a significant improvement in Nigeria’s net forex inflow position. Net inflow surged by 49.39% to reach $17.18 billion in Q2 2024, up from $11.50 billion in Q1.

The increase was primarily supported by autonomous sources, which recorded a net inflow of $14.46 billion compared to $12.35 billion in the previous quarter.

The CBN also reversed its position from a net outflow of $0.85 billion in Q1 to a net inflow of $2.72 billion in Q2.

Despite the gains in net forex inflow, Nigeria’s exchange rate continues to face depreciation pressures.