Dollar Inflow to FX Market Surges to Highest in 3 Years, Report Shows Top Sources

Dollar Inflow to FX Market Surges to Highest in 3 Years, Report Shows Top Sources

  • Forex inflow into the Nigerian foreign exchange market rose to a three-year high in March 2024
  • The total FX inflows into the Nigerian Autonomous Foreign Exchange Market stood at $3.75 billion for March 2024
  • Data from FMDQ shows that local, foreign and CBN sources contributed significantly to the FX inflows’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Foreign exchange inflow into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose in March 2024, reaching the highest monthly level over three years.

The total forex inflow recorded for the month under review stood at $3.75 billion.

Dollar inflows rise in Nigeria
Nigeria records highest dollar inflows in three years Credit: Bloomberg/Contributor
Source: Getty Images

A breakdown of top sources of FX inflows

According to Data from FMDQ, March inflow recorded a 41.7% improvement over the $2.64 billion recorded in February 2024, with local sources accounting for 59% of the total transactions and foreign sources contributing 41% of gross transactions.

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A breakdown of the inflows shows that local sources rose by 43.2% monthly to $2.21 billion in March compared to $1.54 billion recorded in February, caused by individual accretions.

Inflows from individuals rose by $405.8%, while non-bank corporates and exporters rose by 157.7% and 14.6%, respectively.

Meanwhile, the Central Bank of Nigeria (CBN) inflows declined by 65.7%.

Collections from foreign sources spiked by 39.6% monthly to $1.54 as against the $1.1 billion recorded in February, which represents a 50-month high as investors showed positive interest in CBN’s initiatives and improved FX interventions aimed at boosting liquidity and the stability of the Forex market.

Reports say total inflows into NAFEM averaged about $2.47 billion in Q1 2024 compared to the last quarter of 2023, when they reached an average of $1.34 billion compared to $1.09 billion in Q1 2023.

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Dollar inflows boost naira's performance

The development comes as the naira appreciated against the US dollar on Monday, April 8, 2024.

The naira traded at N1,230.60 per dollar on the official foreign exchange market despite Nigeria’s FX reserves declining by $1.5 billion.

At the close of trading on Monday, April 8, 2024, the naira gained about 1.66% as the dollar traded at N1,230.61, better than the N1,251 it traded on Friday, April 5, 2024, at the official Forex market.

Traders quoted the dollar at an intraday high of N1,261 per dollar and a low of N1,200, according to data from NAFEM.

Naira performs better in black market

The foreign exchange market witnessed a dollar supply of $125.55 million, a 49.43% decline from the $248.27 million recorded on Friday, April 5, 2024.

At the parallel market, the naira appreciated trading at N1,200 per dollar as opposed to the N1,245 traded on Saturday, April 6, 2024.

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Currency dealers, banks sell dollar at new rates after CBN crashed forex to N1,101 per dollar

The development comes as the Central Bank of Nigeria reduced the dollar buying rate for Bureau de Change operators to N1,101 from the N1,251 per it sold FX to them the previous week.

The naira’s gain in the parallel market represents 3.33% compared to the N1,240 per dollar it exchanged last week.

Analysts believe the Nigerian currency has gained 52.08%, or about N625, against the US dollar on the black market, according to rates collated from street traders.

CBN crashes dollar price for BDCs earlier reported that the Central Bank of Nigeria (CBN) further crashed the dollar buying rate for Bureau de Change operators (BDCs) to N1,101 per dollar.

The move comes a few days after the BDC operators requested that the CBN review the dollar buying rate.

According to a new circular seen by, the apex bank announced the sale of $10,000 to each BDC at N1,101 per dollar, asking them to sell at least the 1.5% rate to buyers.

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