In March 2025, Nigeria’s foreign exchange (FX) inflows surged to a 22-month high of $3.11 billion, marking a 51% month-on-month increase. This spike was attributed to a rise in inflows from the Central Bank of Nigeria (CBN), non-bank corporates, and exporters/importers, despite a sharp decline in individual contributions. This performance contrasted with a 5.5% drop in total inflows into the Nigerian Foreign Exchange Market (NFEM), which fell to $3.90 billion due to a significant decline in foreign inflows.
While local sources showed growth, the overall inflows were affected by a 61.9% drop in foreign inflows, largely due to global trade uncertainties and reduced market confidence. The Foreign Portfolio Investment (FPI) segment saw a substantial decline, while corporate and Foreign Direct Investment (FDI) segments posted strong growth. Analysts believe that FX inflows will remain stable in the short term, but factors like global trade uncertainties and moderation in yields could restrict future inflows.
The recent decline in oil prices, triggered by new U.S. tariffs on Nigerian exports, added pressure on Nigeria’s FX reserves, which decreased by $135.57 million to $38.17 billion. The tariffs, coupled with increased oil supply from OPEC+, caused turbulence in global markets, further affecting Nigeria’s economic stability. Despite this, the CBN remains committed to ensuring liquidity and supporting a stable FX market through measures like the provision of $197.71 million to authorized dealers.
In response to these pressures, the CBN emphasized its ongoing efforts to monitor market conditions and ensure that Nigeria’s FX framework remains resilient. The bank also reminded authorized dealers to comply with the principles of the Nigeria FX Market Code to maintain the integrity of transactions in the face of shifting global economic dynamics.
Source: The sun