While the rise in the exchange rate is still being worked on, this may be a good time to say dollar inflow into the country is rising.
Foreign investors are gradually beginning to feel at home enough to invest their dollars in Nigerian assets.
This may be the beginning of many good things to come.
The Central Bank of Nigeria (CBN) reported a rise in foreign exchange inflow into the economy in February 2024.
This rise was made possible by a marked surge in remittance payments by Nigerians abroad and purchases of naira assets by foreign portfolio investors.
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CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, said,
“Data shows that overseas remittances rose to US$1.3 billion in February 2024, more than four times the US$300 million received in January.
Foreign Investors Bought More Nigerian Asset In February 2024
“Foreign investors purchased more than US$1 billion of Nigerian assets last month, with total portfolio flows of at least US$2.3 billion recorded thus far in 2024.
She said the US$2.3 billion surpasses the US$ 3.9 billion seen in total for the year, 2023.”
The high FX inflow continued in March 2024, driven by increased investor interest in short-term sovereign debt following the recent adjustment to benchmark interest rates.
According to her, the Government securities issued on March 1 and 6, 2024, was oversubscribed.
This is because foreign investors accounted for over 75% of bids received at the auction.
Cardoso’s Strategy To Tame Inflation
Analysts say it looks like Cardoso’s strategy to tame the rising inflation in the country is paying off after all.
But we must not be quick to jump to conclusions because this may just be a fluke
The CBN Governor, Olayemi Cardoso had set out a detailed strategy to curb inflation, stabilise the exchange rate, and spur confidence in the banking system and economy.
Cardoso used the last Monetary Policy Committee meeting and a conference call with foreign investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.
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“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” Governor Cardoso said.
“When people understand the real issues and see a strategy and a plan, things tend to calm down.
Our objective today is to ensure that the market has supply, that the market functions, and that investors can come in and go out,” he noted.
