Nigeria’s overseas payments increased by about 31% from January to May 2024, reaching $3.31 billion. This rise is attributed to higher foreign debt service and increased direct remittances.
Despite efforts by the Central Bank of Nigeria (CBN) to improve foreign exchange liquidity, the naira’s value has dropped significantly to N1600 due to ongoing currency shortages.
The CBN has reintroduced the Retail Dutch Auction System (RDAS) to manage foreign currency more effectively. The auction successfully sold $876.26 million at a rate of N1,495 per US dollar.
This move aims to stabilize the naira and address the high demand for foreign exchange.
Analysts expect international payments to stay high, driven by government debt repayments and increased trade imports.
However, they caution that any positive impact on the naira may be temporary unless the CBN continues its market interventions.