THE Central Bank of Nigeria (CBN) has revealed that the net foreign exchange (FX) flows into the country increased to $25.4billion in the first six months of 2024.
The CBN cited appreciation in capital importation as a key factor that led to positive records on the inflow.
The apex bank said it’s part of an ongoing commitment to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary.
A statement by the apex bank on Thursday, August 8, said the increase marks a 55 per cent increase from the figure recorded year-over-year.
It also noted that this growth has been fuelled by a rise in capital importation, which reached $6bn in June 2024, and record inflows from diaspora remittances through formal channels.
The new development comes against the backdrop of its $876million auction to 26 banks to resolve unmet FX demands.
The statement reads, “In the latest testament to the Central Bank of Nigeria’s (CBN) ongoing commitment to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary, the apex bank offered $876million to fulfil bids submitted by customers at an auction concluded on Wednesday, August 7, 2024.
“In line with its pledge to provide transparent access to foreign exchange for all legitimate customers, the CBN’s leadership has introduced an additional mechanism through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users,” it further said.
The apex bank also disclosed that the approach aims to foster a more transparent market, reducing information asymmetry and supporting price discovery.
According to the apex bank, the commitment complements the two-way quota system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of foreign exchange has been sold to authorised dealers in the last three weeks.
“The foreign exchange market is also showing signs of improvement and increased depth, with more robust and diversified sources of liquidity contributing to the sustained convergence of exchange rates across all segments of the market.
“The official market recorded a turnover of $43 billion in customer transactions by the end of July 2024, with CBN-supplied liquidity representing less than 5 per cent of total market activities, “the apex bank stated.
The ICIR has reported on various initiatives taken by the apex bank to ensure stability and improvement of the foreign exchange market.
Conversely, there is a weak supply side as most manufacturers and importers complain of the volatile exchange rate in accessing dollar for their business.
In June,the ICIR also reported new measures opened by CBN for eligible International Money Transfer Operators (IMTOs) to access naira liquidity to settle diaspora remittances.
This move is expected to increase the dollar supply in Nigeria’s foreign exchange market and solve Nigeria’s currency problems.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.