Net foreign exchange inflow falls 62% to $950m

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Net foreign exchange inflow falls 62% to $950m

Net foreign exchange (forex) inflow into the economy fell year-on-year (YoY) by 62 per cent to $950 million in January 2022 from $2.5 billion in the corresponding period of 2021.

This is even as the Central Bank of Nigeria (CBN) said it sold $720 million forex through the Investors and Exporters (I&E) and Small and Medium Enterprises (SMEs) windows during the review period.

The CBN disclosed this in its Economic Report for January 2022.

According to the apex bank, forex inflow dropped YoY by 20.3 per cent to $4.36 billion in January 2022 from $5.47 billion in January 2021.

However, forex outflow through the economy rose by 14.8 per cent to $3.41 billion in January 2022 from $2.97 billion in January 2021.

Further analysis showed that YoY forex inflow through the CBN rose by 5.2 per cent to $1.82 billion in January 2022 from $1.73 billion in January 2021.

On the other hand, forex outflow through the bank fell by 8.1 per cent to $2.6 billion in January 2022 from $2.83 billion in January 2021.

CBN said: “The economy recorded lower net foreign exchange inflow in January, driven, mainly, by net flows from the CBN and autonomous sources. Aggregate foreign exchange inflow into the economy declined by 36.7 per cent to $4.36 billion in January 2022, from $6.89 billion in December 2021.

“The total foreign exchange outflow decreased by 5.1 per cent to $3.41 billion from $3.59 billion in the preceding period.

“A net inflow of $0.95 billion was recorded in the month under review, compared with net inflow of $3.29 billion in the preceding period.

“Further analysis shows that foreign exchange inflow into the bank fell by 36.7 per cent to $1.82 billion from $2.88 billion, attributed to 45.4 per cent decline in non-oil components, mainly, TSA and third-party receipts/MDA transfers, other official receipts and swaps.

“Autonomous inflow also decreased by 36.7 per cent to $2.54 billion, from $4.01 billion, due to reduction in invisible purchases.

“Foreign exchange outflow through the bank fell by 18.3 per cent to $2.60 billion from $3.18 billion in December 2021, due, largely, to decrease in public sector/direct payment, 3rd party MDA transfers, sales at the Secondary Market Intervention Sales (SMIS) and Investors & Exporters’ (I&E) windows.

“Consequently, a net outflow of $0.78 billion was recorded through the bank in January, from $0.30 billion in the previous month.”

The report also showed that the forex sold to I&E window rose YoY by 163 per cent to $580 million from $220 million in January 2021.