Nigeria’s foreign exchange market recorded a major rebound in October as total dollar inflows into Nigeria climbed by 62.2 percent month-on-month to $5.15 billion—the highest level in five months, according to data from the FMDQ. The sharp rise reflects renewed investor confidence, both foreign and domestic, amid a more favorable global monetary outlook and improving market sentiment.
Foreign investors led the charge, accounting for 64.5 percent of total inflows. Foreign inflows surged 89.7 percent to $3.32 billion, driven largely by a remarkable 120.7 percent jump in foreign portfolio investment (FPI) and stronger corporate inflows. However, this growth offset a 25.5 percent decline in foreign direct investment (FDI), which remains subdued amid lingering global uncertainties.
On the domestic front, inflows rose 28.4 percent, contributing 35.5 percent of the total market turnover. The growth was supported by a striking 370.6 percent increase in individual inflows and higher corporate receipts, even as Central Bank of Nigeria (CBN) contributions declined by almost 60 percent. The strong performance from private players suggests increasing confidence in the naira and improved liquidity conditions.
Despite the overall rebound, the naira faced mild pressure, slipping 1.03 percent week-on-week to close at ₦1,436.58 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window. The parallel market rate also weakened slightly by 0.8 percent to ₦1,467 per dollar, as dollar demand from importers and corporates rose ahead of year-end transactions. Nonetheless, Nigeria’s external reserves edged up by 0.23 percent to $43.30 billion, supported by higher oil and non-oil inflows.
The upbeat trend extended into the equities market, where total transactions surged 78.5 percent to ₦1.62 trillion in September, according to the Nigerian Exchange (NGX). Domestic investors accounted for 76.1 percent of the activity, while foreign participation climbed to its highest level of the year at 23.9 percent. Analysts at Cordros Capital remain optimistic, projecting that the strong momentum in foreign exchange inflows will continue, supported by sustained confidence, favorable carry-trade opportunities, and improving macroeconomic stability.
source: Leadership