Nigeria’s Foreign Exchange Inflow Soars to $23.60bn

Foreign exchange inflow into Nigeria in the fourth quarter of 2020 rose to $23.60bn from $21.46bn in the previous quarter of the same year, according to a report released by the Central Bank of Nigeria.

According to the Apex Bank’s report titled “Foreign exchange flows through the economy” for the last quarter though there was an increase in foreign exchange flows through the economy in the reviewed quarter compared with the preceding quarter due to the reopening of most economies including Nigeria, the second wave of the coronavirus hampered a return to the levels experienced in the corresponding quarter of 2019.

Part of the report reads: Consequently, the aggregate foreign exchange inflow in the fourth quarter of 2020 was $23.6bn, compared with $21.46bn and $36.32bn in the third quarter of 2020 and the corresponding quarter of 2019, respectively.

This depicts an increase of 10.0 per cent over the previous quarter but a decline of 35 per cent below the level in the corresponding quarter

The report adds that the foreign exchange outflow through the economy rose by 13.1% above the third quarter of 2020 to $8.38bn in the period under review but declined by 51.5 per cent in the corresponding quarter of 2019.

The foreign exchange flow through the economy resulted in a net inflow of $15.22bn in Q4, 2020, compared with the net inflow of $14.05bn and $19.05bn in the preceding quarter and corresponding quarter of 2019 respectively.

The foreign exchange market or forex is the largest market in the world as it sees a daily exchange of trillions of dollars through the buying and selling of currency pairs. The forex is also responsible for so many important aspects of currency regulation, from determining exchange rates to hedging against risk for international companies. 

Unlike other markets regulated by exchanges, the uniqueness of the forex market is that it is unregulated and also decentralized.