SAT NOV 09 2024-theGBJournal| According to the data released by the Central Bank of Nigeria (CBN), International payments facilitated by the apex bank increased by 11.3% y/y to USD4.36 billion in 7M-24 (7M-23: USD3.92 billion).
This growth is primarily driven by a significant increase in foreign debt service and payments (accounts for 63.8% of the total international payments), which soared by 53.6% y/y to USD2.78 billion (7M-23: USD1.81 billion) underpinned by repayments of matured multilateral and bilateral loans.
However, payments for letters of credit dipped by 57.0% y/y to USD391.91 million (7M-23: USD912.36 million), partly reflecting lower imports amid weaker consumer demand induced by high inflationary pressures.
Similarly, direct remittances declined by 0.8% y/y to USD1.18 billion due to decreased payments for international services by Nigerian residents.
Looking ahead, analysts at Codros Research say they expect international payments to remain elevated, driven by the FG’s debt repayment and servicing obligations.
Elsewhere, they expect payments for letters of credit to stay subdued as naira depreciation and fragile consumer demand induced by high inflation continue to suppress total non-oil imports.
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