CBN Identifies Capital Importation, Diaspora Remittances As Being Responsible For Nigeria’s Net FX Flows Increase

The Central Bank of Nigeria has disclosed that capital importation and diaspora remittances have boosted the net foreign exchange flows into the country which has increased to $25.4bn in the first six months of 2024.

This marks a 55 per cent increase from the figure recorded year-over-year.

The apex bank noted that this development is an evidence that progress is being made as a result of its policy measures.

According to a statement from the apex bank on Thursday, it noted that this growth has been fueled by a rise in capital importation, which reached $6bn in June 2024, and record inflows from diaspora remittances through formal channels.

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The statement read, “The CBN’s policy objectives are yielding tangible results and bolstering market confidence. Net foreign exchange flows rose to $25.4bn between January and June, marking a 55 per cent year-over-year increase.

“This growth has been driven by a rise in capital importation, which reached $6bn in June 2024, and record inflows from diaspora remittances through formal channels.”

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The CBN further noted that over $305m of foreign exchange has been sold to authorized dealers in the last three weeks through a two-way quote system, which has been deployed over the past few months to enhance liquidity in the interbank market.

According to the statement, the CBN offered $876m to meet bids submitted by customers during an auction concluded on Wednesday, August 7, 2024.

This was done through the Retail Dutch Auction System, which is designed to facilitate FX sales to end users directly, promoting a more transparent market, reducing information asymmetry, and aiding in price discovery.