SAT FEB 08 2025-theGBJournal| Total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose by 53.3% m/m to USD4.74 billion in January 2025 (December: USD3.09 billion), Based on the data obtained from FMDQ,
The improvement was primarily due to a substantial increase in inflows from foreign sources (48.8% of total inflows) and collections from local sources (51.2% of total inflows).
Specifically, inflows from foreign sources increased by 192.1% m/m to USD2.31 billion (December: USD790.30 million) – the highest level in twenty-three months – supported by increased market confidence and improved carry trade opportunities in the capital market.
As a result, the FPI (+213.0% m/m) segment recorded higher accretion, while inflows from other corporates (-45.4% m/m) and FDI (-36.5% m/m) segments dropped.
At the same time, inflows from local sources increased by 5.6% m/m to USD2.43 billion (December: USD2.30 billion) driven by increase in inflows from individuals (+33.2% m/m), exporters/importers (+20.9% m/m) and CBN (+20.1% m/m) segments, amid a decline in the non-bank corporates (-10.7% m/m) segment.
Barring any shock, we 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).
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