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Forex demand falls by 14.5 per cent to $9.5 bn in Q2

By Babajide Komolafe

Demand for foreign exchange under the Retail Dutch Auction System (RDAS) fell by 14.5 per cent to $9.5 billion in the second quarter of the year.

The Central Bank of Nigeria disclosed this in its economic report for the second quarter. The report said, “Foreign exchange demand  at the official foreign exchange market Foreign exchange demand by the authorized dealers stood at US$9.53 billion, indicating a decline of 14.5 per cent from the level in the preceding quarter. Relative
to the level in the corresponding period of 2008, demand rose by 85.7 per cent.

Consequently, a total amount of US$7.84 billion was sold by the CBN during the period, indicating a fall of 3.4 per cent from the level in the preceding quarter.
Under the RDAS, the weighted average exchange rate of the Naira vis-à-vis the US dollar depreciated by 0.6 per cent to =N=147.76 per dollar from =N=146.86 per dollar in the preceding quarter. It also showed a depreciation of 20.2 per cent from the level in the corresponding period of 2008.

In the bureaux-de-change segment of the market, the naira traded at an average of
=N=175.68 per dollar, compared with =N=160.37 and =N=118.81 per dollar in the preceding quarter and the corresponding quarter of 2008, respectively. Consequently,
the premium between the official and the bureaux-de-change rates widened from 9.2 per cent in the preceding quarter to 18.9 per cent Available data on aggregate foreign exchange flows through the economy indicated that total inflow amounted to US$12.23 billion, representing a decline of 31.8 and 52.0 per cent from the levels in the preceding
quarter and the corresponding period of 2008.

Oil sector receipts, which accounted for 26.4 per cent of the total, stood at US$3.23 billion, compared with the respective levels of US$4.25 billion and US$10.31 billion in the preceding quarter and corresponding period of 2008.

Non-oil public sector inflows, which accounted for 18.3 per cent of the total, however, rose by 51.4 per cent, while autonomous inflow, which accounted for 55.3 per cent decline by 44.6 per cent.

At US$9.47 billion, aggregate foreign exchange outflow from the economy declined by 17.4 and 17.2 per cent from the levels in the preceding quarter and the corresponding
period of 2008, respectively. The fall in outflow relative to the preceding quarter was attributed largely to the lull in activities at the inter-bank segment of the foreign exchange market during the review quarter.


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