Domestic Sources Drive $31.06bn Forex Inflows in Seven Months as Foreign Participation Slips
Nigeria’s foreign exchange market recorded total inflows of $31.06 billion between January and July 2025, according to FMDQ Securities Exchange data. Domestic sources accounted for the majority, contributing $18.83 billion, while foreign sources brought in $12.23 billion, representing 39.4% of the total. Exporters and importers were the largest single contributors with $10.21 billion, followed by the Central Bank of Nigeria (CBN), which injected $3.15 billion into the market.
The year began strongly, with inflows rising 53.3% month-on-month (m/m) in January to $4.74 billion, boosted by a 192.1% jump in foreign inflows to $2.31 billion, the highest in nearly two years. This growth was attributed to policy reforms like the Electronic Foreign Exchange Market System (EFEMS), which enhanced transparency and investor confidence. Foreign portfolio investments surged 213%, even as foreign direct investment (FDI) and non-bank corporate inflows fell. Local inflows also climbed 5.6% to $2.43 billion.
Momentum slowed in February and March, with inflows declining 12.9% and 5.5% respectively, amid global trade uncertainties and lower yields that dampened foreign portfolio investor appetite. February’s $4.12 billion inflows reflected broad-based declines in both foreign and local contributions. By March, total inflows fell further to $3.90 billion, as foreign inflows plunged 61.9% to $787.2 million — the lowest in six months — due to waning market confidence.
April saw further weakness, with total inflows dipping 5.7% to $3.67 billion, as foreign contributions fell 16.5% to a seven-month low of $657.4 million despite a sharp rise in FDI. Local inflows, making up over 82% of the total, edged up 2.9% to $3.02 billion, supported by stronger inputs from individuals and the CBN. The trend reversed in May, with inflows surging 62% to $5.96 billion — the highest monthly total in the period — driven by record domestic inflows of $4.96 billion and improved foreign participation at $997.6 million.
The gains proved short-lived. In June, total inflows fell 28.1% to $4.28 billion due to a sharp drop in local inflows, although foreign inflows surged to $2.73 billion — the highest in over two years — on strong foreign portfolio investment activity. July brought another downturn, with total inflows slipping 20.9% to $3.83 billion. Foreign inflows declined 35.6% to $1.75 billion, while local inflows eased slightly to $2.07 billion, cushioned by strong contributions from individuals, the CBN, and non-bank corporates.
Source: Nairametrics