The Central Bank of Nigeria (CBN) reported a 2.97% decline in net foreign exchange inflow in Q3 2024, totaling $14.46 billion compared to $14.89 billion in Q2. However, this represents a year-on-year increase of 75.91% from $8.22 billion in Q3 2023. The rise in official inflows offset a decline in autonomous sources, with total foreign exchange inflows reaching $22.89 billion. Outflows also grew by 15.18% to $8.43 billion, driven by increased activity through official channels.
Diaspora remittances surged to $4.22 billion from January to October 2024, nearly double the $2.62 billion recorded during the same period in 2023. This growth was attributed to improved remittance systems and policies encouraging trust among Nigerians abroad. Despite these inflow improvements, the average exchange rate depreciated by 14.62% in Q3, reflecting demand pressures. External reserves rose to $39.29 billion, sufficient to cover nearly nine months of imports.
Looking ahead, inflation, currently at 34.6% in November, is projected to remain elevated due to energy and transport costs stemming from ongoing reforms. However, fiscal reforms and increased domestic oil production are expected to bolster the economy. Risks include volatile global oil prices and low production levels relative to OPEC quotas. The CBN remains optimistic about external sector performance and sustained improvements in trade and investment.