Dollar inflows into Nigeria’s official foreign exchange market weakened sharply last week, signalling renewed caution among foreign investors despite recent market reforms.
Data from the Nigeria Foreign Exchange Market show total inflows declined by 20.67 percent to 593.70 million dollars, down from 748.40 million dollars recorded a week earlier.
A research note by Coronation Merchant Bank revealed that the drop was largely driven by a steep fall in offshore participation. Foreign portfolio investment fell by more than 70 percent to 46 million dollars, while foreign direct investment declined to just 7 million dollars, leaving foreign sources responsible for barely 17 percent of total FX inflows.
The News Chronicle understands that with global investors stepping back, domestic sources now dominate FX supply, contributing nearly 83 percent of inflows. Individuals, the Central Bank of Nigeria and local exporters accounted for most of the liquidity in the official market.
The naira showed mixed performance during the period. It gained modestly at the official window, closing at 1,430.85 to the dollar on sustained CBN support, but weakened in the parallel market where demand pressures persisted.
Meanwhile, Nigeria’s external reserves edged up slightly to 45.50 billion dollars, even as the central bank continued to intervene to stabilise the currency. Analysts say the recent stability remains fragile and will depend largely on restoring investor confidence and attracting sustainable foreign capital inflows.
