SUN MARCH 09 2025-theGBJournal| Total inflows into the Foreign Exchange Market declined by 12.9% m/m to USD4.12 billion in February (January: USD4.74 billion), according to the data obtained from FMDQ.
This was driven by a broad-based decline across foreign (50.1% of total transaction value) and local (49.9% of total transaction value) inflows.
The breakdown shows that inflows from foreign sources declined by 10.5% m/m to USD2.07 billion (January: USD2.31 billion) reflecting declines in inflows from FPI (-12.5% m/m) and FDI (-12.3% m/m), amid a surge in other corporates inflows (+172.6% m/m).
At the same time, inflows from local sources dipped by 15.1% m/m to USD2.06 billion (January: USD2.43 billion) due to declines in inflows from individuals (-62.5% m/m), CBN (-36.3%) and exporters/importers (-22.5% m/m), amid an increase in inflows from non-bank corporates (+3.5% m/m).
The moderation in yields following the rebased inflation print (January 2025: 24.82% y/y) is likely to dampen carry trade opportunities, restraining FX inflows from FPIs, ultimately affecting overall FX liquidity.
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