Nigeria Borrows $1.71 Billion: Impact on Exchange Rates

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In the first nine months of 2023, Nigeria secured $1.71 billion in foreign loans to enhance the country’s foreign exchange inflow. According to data from the National Bureau of Statistics, total capital importation during this period, including Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), and others, reached $2.82 billion. Notably, foreign loans accounted for a substantial 60.80% of the total foreign exchange inflows into the country.

However, despite the injection of foreign loans, there has been a slowdown in foreign exchange inflows in 2023. The decline in foreign exchange inflows is evident in falling FDI and FPI figures. FDI and FPI inflows dropped from $383.85 million and $2.16 billion to $193.4 million and $843.24 million, respectively. The fluctuation of the naira in the foreign exchange market has been attributed to the lack of dollar supply.

Looking ahead, the Minister of Finance, Wale Edun, anticipates approximately $10 billion in inflows in the near term. This substantial inflow is expected to address foreign exchange backlog issues and stabilize the naira. The key words to remember are foreign loans, foreign exchange inflow, capital importation, naira fluctuation, and Minister of Finance. Stay tuned for updates on how these financial dynamics shape Nigeria’s economic landscape.

Source: Punch Newspaper

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