Data obtained from the FMDQ revealed that the total inflows into Nigeria’s Investors and Exporters Window (I&E Window) reached $2.55 billion in May and June. This marked the second consecutive monthly increase following the unification of naira rates.
In June, the I&E Window recorded a total inflow of $1.41 billion, up from $1.14 billion in May. Foreign inflows stood at $298.8 million, while local inflows contributed $1.11 billion, driven by non-bank corporates and exporters.
Codros Securities expects the ongoing FX market reforms to enhance liquidity conditions in the foreign exchange market, but foreign investors may adopt a cautious approach in the short term as they await actions by the Central Bank of Nigeria (CBN) to clear FX backlogs and the direction of short-term interest rates.
With international oil companies now allowed to sell dollars to dealing member banks, FX liquidity in the I&E market is expected to improve, supporting the local currency. The recent exchange rate unification move by the CBN has contributed to the improvement in FX inflows.
Opinion: The increase in inflows to Nigeria’s Investors and Exporters Window is a positive development for the country’s foreign exchange market. The unification of naira rates and ongoing FX market reforms are gradually improving liquidity conditions. However, sustaining the momentum and attracting more foreign investors will require continued policy reforms and efforts to address FX backlogs and inflationary pressures.