Foreign exchange flows through the economy resulted in a net inflow of US$12.10 billion in the fourth quarter of 2018

By Anayo Ezugwu

IN THE fourth quarter of 2018, Nigeria’s foreign exchange inflow through the Central Bank of Nigeria, CBN, rose by 12.3 percent, while outflow fell by 13.8 percent. The CBN said the increase reflected the rise in both oil and non-oil receipts, including proceeds from government debts, treasury single account, TSA, and third party receipts.

In its fourth quarter 2018 economic report, which was published last week, the CBN said the total non-oil export proceeds received through banks rose by 22.5 percent above the level at the end of September 2018. The report said the average exchange rate at the investors’ and exporters’ window, the Bureaux De Change, BDC, and the inter-bank segment of the foreign exchange market were N364.27/US$, N362.52/US$ and N306.70/US$, respectively, in the review quarter.

It stated that at US$42.54 billion, the gross external reserves fell by 0.2 percent, compared with the level at the end of September 2018. “Favourable international price and increased domestic production of crude oil strengthened the external sector in the fourth quarter of 2018. Consequently, aggregate foreign exchange inflow through the CBN amounted to US$14.51 billion, and indicated 12.3 percent and 1.3 percent increase over the levels in the preceding quarter and the corresponding period of 2017, respectively.

“The increase reflected the rise in both oil and non-oil receipts, including proceeds from government debts, TSA, third party receipts, interest on reserves and investments, unutilised funds from foreign exchange transactions, unutilised IMTO funds and other official receipts. Aggregate outflow through the CBN fell to US$14.60 billion, from US$16.94 billion in the fourth quarter of 2018, but increased above the US$8.38 billion recorded in the corresponding period of 2017.

“The decline in outflow relative to the preceding quarter, reflected the fall in inter-bank utilisation, external debt service, forex special payment and SDR charges. Overall, a net outflow of US$0.09 billion was recorded through the bank, compared with US$4.02 billion in the preceding quarter and a net inflow of US$5.94 billion in the corresponding period of 2017, respectively,” it said.

According to the CBN report, aggregate foreign exchange inflow into the economy amounted to US$27.64 billion at the end of December 2018. This indicated an increase of 2.8 percent and 7.1 percent, above the levels in the preceding quarter and the corresponding period of 2017, respectively.

The development, the report stated was as a result of the 12.3 percent increase in inflow through the CBN. It noted that oil sector receipts, which accounted for US$3.02 billion, indicated a decrease of 14.5 percent below the level at the end of preceding quarter but an increase of 9.2 percent above the level at the end of the corresponding period of 2017.

“Non-oil public sector inflow, at US$11.49 billion (41.6 percent of the total), rose by 22.5 percent above the level at the end of the third quarter of 2018, but declined by 0.6 percent, below the level in the corresponding period of 2017. Autonomous inflow, at US$13.13 billion, fell by 6.1 percent and 14.8 percent below the levels at the end of the preceding quarter and the corresponding period of 2017, respectively.

“Inflow from autonomous sources accounted for 47.5 percent of the total. At US$15.54 billion, aggregate foreign exchange outflow from the economy fell by 12.7 percent below the level in the preceding quarter, but was 69.0 percent higher than the level in the corresponding period of 2017. The development, relative to the preceding quarter was driven, mainly, by 13.8 percent decline in outflow through the CBN. Thus, foreign exchange flows through the economy resulted in a net inflow of US$12.10 billion in the review quarter, compared with US$9.09 billion and US$20.54 billion in the preceding quarter and the corresponding period of 2017, respectively.”

– Feb. 8, 2019 @ 12:45 GMT |