Upsurge in Dollar Inflow Reported by CBN as Remittances Quadruple

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The Central Bank of Nigeria (CBN) has announced a surge in foreign exchange inflow in February 2024.

This increase is attributed to substantial remittance payments by Nigerians overseas and purchases of naira assets by foreign portfolio investors.

According to Mrs. Hakama Sidi Ali, the Acting Director of Corporate Communications at the CBN, overseas remittances soared to US$1.3 billion in February 2024, marking a remarkable four-fold increase from the US$300 million received in January.

Foreign investors also showed significant interest in Nigerian assets, with purchases exceeding US$1 billion last month.

The total portfolio flows for 2024 reached at least US$2.3 billion, showcasing a positive trend compared to the US$3.9 billion recorded for the entire previous year.

March 2024 continued to witness higher FX inflows, driven by increased investor interest in short-term sovereign debt following adjustments to benchmark interest rates.

Notably, government securities issuances were oversubscribed, with foreign investors accounting for over 75% of bids received at auctions conducted on March 1 and 6, 2024.

Sidi recalled that during last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors, CBN Governor Mr. Olayemi Cardoso outlined a comprehensive strategy aimed at curbing inflation, stabilizing the exchange rate, and boosting confidence in the banking system and economy.

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This strategy was designed to establish expectations for sustained increases in Nigeria’s foreign currency reserves and enhanced liquidity in the foreign exchange 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.

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