By Babajide Komolafe
Foreign exchange inflow into the economy fell by 11.85 per cent to $2.38 billion in October, said the Central Bank of Nigeria, CBN.
Meanwhile, the Naira further depreciated on last week as foreign exchange demand more that doubled at the official foreign exchange auction.
Last week, demand for foreign exchange at the official foreign exchange auction rose by over 100 per cent to $586.1 million from $288.8 million due to backlog of demand occasioned by the Sallah holiday which reduced official foreign exchange auction to one the previous week. This prompted 19 kobo depreciation of the naira at the official market as the official exchange rate rose to N149 per dollar from N148.81 per dollar.
The naira also depreciated by 15.5 kobo as the interbank rate rose to N150.6550 from N150.5 the previous week.
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$67.17 billion). The Committee noted with satisfaction the complementary role of autonomous inflows in moderating demand pressure in the foreign exchange market.’’
Reviewing the foreign exchange market, the CBN said, ‘’In October, the WDAS average closing rate was N151.25/US$ 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).
At the interbank segment, the average buying and selling rates for October, were N151.68/US$ and N151.78/US$, compared with N152.51/US$ and N152.61/US$ respectively recorded in September, representing an appreciation of 83 kobo (or 0.54 percent). On November 15, 2010 the corresponding rates were N150.65/US$ and N150.75/US$ as against N151.68/US$ and N151.78/US$, in October, registering an appreciation of 103 kobo (or 0.68 per cent) At the BDC segment, the average buying and selling rates in October were N151.98/US$ and N153.98/US$ respectively, compared with N152.30/US$ and N153.80/US$ in September.
The buying rate represented an appreciation of 32 kobo (0.21per cent) while selling rate represented a depreciation of 18 kobo (or
0.12 percent). The buying and selling rates on November 15 were N151.50/ US $ and N153.50/ US$ compared with N151.98/US$ and N153.98/US$ for October, represented an appreciation of 48 kobo (or 0.31 per cent). Thus, the stability of the naira exchange rate since the first half of 2009 continued into 2010. The MPC believes that the relative stability in the foreign exchange market is likely to be sustained in the near term.
The Committee would continue to monitor developments in the market to ensure that measures are taken to eliminate speculative demand and exchange rate volatility.
The gross external reserves stood at US$34.27 billion on 15th November, 2010 compared with US$33.597 billion as at end-October and US$34.59 billion as at end-September.’