SAT OCT 05 2024-theGBJournal| Based on data from FMDQ, total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) declined by 7.1% m/m to USD2.17 billion in September (August: USD2.34 billion).
The decline was driven by a broad-based shortfall across local (84.1% of total transaction value) and foreign (15.9% of total transaction value) inflows.
Analysing the breakdown provided, inflows from local sources dipped by 6.0% m/m to USD1.83 billion (August: USD1.94 billion) due to declines across the Individuals (-53.1% m/m), non-bank corporates (-27.5% m/m) and exporters (-4.7% m/m) segments despite the more robust inflow from the CBN segment (+184.2% m/m).
Similarly, inflows from foreign sources declined by 12.4% m/m to USD345.50 million (August: USD394.50 million), partly due to weak investor confidence.
Over the short term, we expect FX liquidity conditions to remain weak, primarily due to limited intervention by the CBN. This is likely to erode market confidence and intensify pressure on the naira.
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