The Central Bank of Nigeria (CBN) reported a large increase in foreign exchange inflows to the economy in February 2024.
The surge is attributable to significant remittance contributions by Nigerians living abroad and acquisitions of naira assets by foreign portfolio investors.
Mrs Hakama Sidi Ali, the apex bank’s Acting Director of Corporate Communications, confirmed this in a statement released to the media.
Sidi stated that the Bank’s figures show that overseas remittances increased to US$1.3 billion in February 2024, more than four times the US$300 million received in January.
She also stated that foreign investors purchased more than US$1 billion in 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 witnessed in entire previous year.
According to Sidi, greater FX inflows persisted in March 2024, driven by heightened investor interest in short-term sovereign debt following the recent change in benchmark interest rates.
She stated that government securities issuances had been heavily oversubscribed, with foreign investors accounting for more than 75% of bids received at auctions held on March 1 and 6, 2024.
Sidi recalled that the CBN Governor, Mr. Olayemi Cardoso, laid out a detailed strategy to reduce inflation, stabilise the exchange rate, and boost confidence in the banking system and economy, using last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the forex market.
“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” Governor Cardoso said.
“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.