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Forex inflow falls by 11% in October, CBN

Babajide Komolafe

Foreign exchange inflow into the economy fell by 11.85 per cent in $2.38 billion October, said the Central Bank of Nigeria, CBN.
Meanwhile, the Naira further depreciated on Wednesday despite decline in foreign exchange demand at the official foreign exchange auction.

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In the communiqué issued at the end of  the Monetary Policy Committee, MPC  meeting held from Monday to Tuesday, the CBN said that, “The total foreign exchange inflow in October was US$2.38 billion, representing a decrease of US$0.32 billion or 11.85 per cent below the US$2.70 billion recorded in the preceding month.

Total outflows or payments in October amounted to US$3.46 billion, a decrease of US$1.62 billion or 31.89 per cent compared with US$5.08 billion recorded in the preceding month. Consequently, the net outflow during this period was US$1.09 billion.

Inflows from autonomous sources in October were US$10.43 billion compared with US$7.55 billion in September. Cumulatively from January-October 2010, total foreign exchange inflows to the market amounted to US$ 88.32 billion comprising funds from the CBN (US$21.15 billion) and from autonomous sources such as oil companies, international institutions and home remittances (US$67.17 billion).

The Committee noted with satisfaction the complementary role of autonomous inflows in moderating demand pressure in the foreign exchange market.”

On Wednesday, demand for foreign exchange at the official foreign exchange auction  fell by 25 per cent to $281 million from $306 million on Monday. The naira however fell by .09 kobo as the official exchange rate rose marginally to N149 per dollar from N148.91 per dollar. At the interbank foreign exchange market the naira also lost 17.5 kobo as the interbank rate rose to N150.68 per dollar from N150.5650 per dollar.

This implies that the naira has lost 27.5 kobo at the interbank market between Monday and Wednesday, while it lost 20 kobo in the official market.

Reviewing the foreign exchange market, the CBN said, ”In October, the WDAS average closing rate was N151.25/US$ compared with N151.07/US$ recorded in September, representing a depreciation of 18 Kobo (0.12 per cent). On November 15, 2010, the WDAS exchange rate was N150.29/US$ compared with N151.25/US$ for October, representing an appreciation of 96 kobo (0.64 per cent).


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