Forex inflows into Nigeria autonomous foreign exchange market rise by 53%

Data from FMDQ has shown that total foreign exchange inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose by 53.3% to $4.74 billion in January from $3.09 billion in December, 2024. The improvement, according to Cordros Capital Limited was primarily due to a substantial increase in inflows from foreign sources and collections from local sources. Further details indicated that foreign sources accounted for 48.8 per cent of the total inflows in the forex market while collection from local sources accounted for 51.2 per cent of the sum. Specifically, inflows from foreign sources increased by 192.1 per cent in January to $2.31 billion from $790.30 million in December – the highest level in twenty-three months. This strong FX inflows boost was supported by increased market confidence and improved carry trade opportunities in the capital market.
As a result, the foreign portfolio investors segment, which rose by +213.0 per cent month on month, recorded higher accretion, while inflows from other corporates and foreign direct investment segments dropped by 45.4 per cent and 36.5 per cent respectively. At the same time, inflows from local sources increased by 5.6 per cent to $2.43 billion from $2.30 billion driven by increase in inflows from individuals, exporters/importers and CBN segments, amid a decline in the non-bank corporates segment.
FX supply from individuals climbed 33.2 per cent in January, exporters inflows rose by 20.9 per cent and 20.1 per cent increase in CBN inflows was reported though non-bank corporates declined by 10.7 per cent in the same month. Barring any shock, analysts at Cordros Capital Limited anticipate FX inflows to remain robust in the short term due to improved market confidence, which has been bolstered by the adoption of the Electronic Foreign Exchange Market System (EFEMS).