Forex Inflow Into Nigeria Declines as Naira Trades at New Rates in All Markets

• Foreign exchange inflows into the Nigerian FX market dropped in April due to  the ongoing global tariff war
• Data shows that total foreign exchange inflow declined by 5.7% per month to $3.67 billion from $3.90 billion in March
• Additionally, foreign portfolio investment also dropped by 16.5% to $657.4 million, the lowest in seven months

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Foreign exchange inflows into the Nigerian Foreign Exchange Market (NFEM) declined in April, showing the effect of the global tariff war and uncertainties caused by falling oil prices.

Data from the FMDQ shows that total FX inflows dropped by 5.7% monthly to $3.67 billion, from $3.90 billion the previous month.

Portfolio investment declines in Nigeria

The drop was reportedly caused by a 16.5% decline in foreign-sourced inflows to $657.4 million, the lowest since October 2024.

Also, foreign portfolio investments declined by 15.7%, while inflows from other corporates fell by 40.5%.

However, foreign direct investment rose by 112.7% per month.

According to reports, local sources, which accounted for 82.1% of total inflows, also recorded a slight decline of 2.9% to $3.02 billion.

Experts attributed the decline in inflows to exporters/importers of less than 23.9% and non-bank corporates of less than 23.3%, despite a significant increase in inflows from individuals and the Central Bank of Nigeria (CBN).

Analysts say they expect FX inflows to remain stronger than in 2024 at $2.54 billion monthly, buoyed by CBN’s reforms.

They disclosed that sustained external pressures could keep liquidity constrained in the near term.

The naira appreciates slightly in April

Available data shows that the naira appreciated by 0.4% weekly to N1,589 per dollar during the period amid CBN’s $116 million intervention.

Gross reserves also increased, rising by $136 million to $37.93 billion as of April 30, 2025.

The analysts also warned that global uncertainty continues to be a risk to capital inflows and the naira’s stability, as market watchers expect the apex bank to maintain active intervention to prevent further volatility.

Leadership reports that the overnight rate eased marginally to 26.8% as system liquidity remained healthy at N1.36 trillion.

Nigeria’s financial instruments experience mixed sentiments

Treasury bills also attracted bullish sentiment, as average yields fell by 14 basis points to 23.7%.

CBN’s Open Market Operation (OMO) auction was oversubscribed, with N804.85 billion from N1.06 trillion in bids.

Reports say bond markets maintained a bearish run on the short end of the curve amid persistent positive sentiment as average yields increased by 2 basis points to 19%, with January bond selling off.

Speculators cash out as the dollar soars

Legit.ng earlier reported that the Nigerian currency has crashed against the US dollar for the second day this week, amid renewed volatility in the FX markets.

Experts have speculated further crash of the local currency amid global trends such as falling oil prices and dwindling national FX reserves.

The naira’s continued collapse has also been blamed on the sweeping trade tariffs imposed by the US President, Donald Trump.

Proofreading by Kola Muhammed, copy editor at Legit.ng.

Source: Legit.ng