WED. 15 FEB, 2023-theGBJournal| Inflows into the Investors & Exporters Window (IEW) shrank by 54.1% m/m to US$847.20 million in January after hitting a 12-month high in December 2022 (US$1.85 billion).
On the one hand, foreign investors remain on the sidelines as the lingering FX illiquidity bites harder amidst the lack of FX reforms and weak domestic macro narrative.
Thus, inflows from foreign investors settled at US$114.00 million (December: 109.80 million).
On the other hand, inflows from the local sources (-57.8% m/m to USD733.20 million) settled at a 4-month low as supply dipped across all the different local segments (Non-bank corporates: -62.1% m/m | Exporters: -56.1% m/m | CBN: -15.8% m/m | Individuals: -67.7% m/m).
Analysts at Cordros in a notes to theG&BJournal say FX liquidity conditions will remain frail over the short-to-medium term in the absence of reforms to attract US dollar inflows into the economy.
‘’The low FX liquidity conditions will also be driven by the lingering global uncertainties and higher global interest rates, limiting foreign inflows to the economy amid uncertainties over the 2023 general elections,’’ Cordros said.
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