The Central Bank of Nigeria (CBN) has released its third-quarter economic report, revealing a slight decrease in net foreign exchange inflows to $14.46 billion compared to the previous quarter. While inflows from official sources increased, autonomous sources declined, contributing to the overall decrease.
The report highlighted a 2.97 percent decline in net foreign exchange inflows from $14.89 billion in the second quarter to $14.46 billion in the third quarter of 2024. However, compared to the same period in 2023, net foreign inflow witnessed a significant 75.91 percent increase from $8.22 billion.
“Inflows through the bank rose by 39.63 per cent to $11.86 billion from $8.49bn, while autonomous sources fell by 19.66 per cent to $11.03bn from $13.72bn in the preceding quarter,” the report stated.
Meanwhile, diaspora remittances continued to surge, reaching $4.22 billion between January and October 2024, nearly double the 2.62billionrecordedduringthesameperiodin2023.Thisgrowthisattributedtoimprovedefficiencyintheremittancesystemandthepositiveimpactofgovernmentpolicies.ThereportalsonotedadepreciationoftheNigerianAutonomousForeignExchangeMarket(NAFEX)rateby14.62percenttoN1,588.64/ in Q3 2024, owing to increased demand pressure.
Inflationary Pressures Persist
Despite positive developments in foreign exchange inflows, inflation remains a significant concern. Nigeria’s inflation rate surged to 34.60 percent in November 2024, driven primarily by food and energy costs. While the CBN expects inflation to moderate in the coming months, it is likely to remain above the target rate of 21.4 percent.
Looking Ahead
The CBN report anticipates a positive outlook for the external sector, driven by sustained improvements in trade surplus, higher domestic crude oil production, and the full operation of the Dangote and Port Harcourt refineries.
However, the report also acknowledges potential risks, such as volatility in global crude oil prices and low production.
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