Monday, September 23, 2019

CBN: Forex inflow hits $91bn in 2017

Central Bank Of Nigeria

The Central Bank of Nigeria (CBN) says that the aggregate foreign exchange inflow into Nigeria in 2017 stood at $91 billion dollars. This figure is reported to be an increase of 45 percent from $62.75 billion in 2016.

This was contained in the just released Draft 2017 annual report released on Wednesday and posted on the bank’s website. The bank also reported that it surpassed the total outflow by $57.32 billion in the period under review.

CBN Logo
                               CBN Logo

According to the report, inflow through the CBN stood at $42.17 billion, while inflow through other autonomous sources amounted to $48.33 billion.

Inflow through the CBN accounted for 46.3 percent, while autonomous sources accounted for 53.7 percent.

Aggregate foreign exchange outflow from the economy, also increased by 31.8 percent to $33.68 billion, more than the $25.55 billion aggregated in 2016.

The report stated that the outflow through the CBN accounted for 90.7 percent, translating to about $30.55 billion, an increase from $23.16 billion in 2016.

Outflow from autonomous sources also totaled $3.13 billion in the same period.

This increase has been attributed to the increased and sustained intervention by the CBN in the inter-bank and Bereau De Change (BDC) segments of the foreign exchange market.

The Report states, “After the external shock induced slowdown, the Nigerian economy began to recover and exited recession during 2017. Having recorded a 1.6 per cent contraction in 2016, the economy expanded by 0.8 per cent in 2017.

This rebound derives both from the favourable outcomes in international oil market and from improved non-oil performance following the various efforts at diversifying the economy. Similar improvements were displayed by domestic prices changes as headline inflation moderated from 18.6 per cent in December 2016 to 15.4 per cent in December 2017. In the financial markets, foreign exchange pressures which characterised the preceding year abated considerably during 2017 as the naira-dollar exchange rate appreciated, converged and stabilised across the various windows and segments of the market. External reserves also recovered remarkably during the year under review with a 45.8 per cent annual accretion to US$39.35 billion as at end-December 2017. The burgeoning investors’ optimism and brightening business sentiments that resulted from the effective policies and the macroeconomic rebound also reflected in capital market gains.

Consequently, the Nigeria All-Share Index (ASI) rallied by 42.3 per cent to 38,243.2 at end-December 2017 from 26,874.6 at end-December 2016. These welcome outcomes and the economic rebound followed a number of
countervailing monetary policy, exchange rate policy and development finance actions of CBN. Based on the understanding that the welfare gains of rapid disinflation outstripped the benefits of output stabilisation, the Bank’s Monetary Policy Committee maintained a tight stance during the year in order to rein in inflation. This was supported with the continuous use of Open Market Operations. The Bank also adopted far-reaching strategies to stabilize the exchange rate and eliminate pressures from speculators, bettors, roundtrippers and rent-seekers.

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