By Chris Agabi
Following multiple policies to stabilise the exchange rate of the US dollar against the naira by the Central Bank of Nigeria (CBN), foreign investors are renewing interest and investing in the Nigerian economy.
Data from the CBN show that between January and February, 2024 showed that foreign portfolio investors staked $2.3 billion into the Nigerian economy.
Speaking with newsmen in Abuja, the Bank’s Acting Director of Corporate Communications, Mrs Hakama Sidi Ali, said CBN has reported upsurge of dollar inflow as remittances quadruple with foreign investors return.
She said the Central Bank of Nigeria (CBN) has reported a significant increase in foreign exchange inflow into the economy in February 2024, with marked increments in remittance payments by Nigerians overseas and purchases of naira assets by foreign portfolio investors.
According to her, the “Bank’s data indicates that overseas remittances rose to $1.3 billion in February 2024, more than four times the US$300 million received in January” she said.
“Foreign investors purchased more than $1 billion of Nigerian assets last month, with total portfolio flows of at least $2.3 billion recorded thus far in 2024 compared to $3.9 billion seen in total for last year,” she added.
She said higher FX inflows continued in March 2024, driven by increased investor interest in short-term sovereign debt following the recent adjustment to benchmark interest rates. She noted that Government securities issuances had been significantly oversubscribed, with foreign investors accounting for over 75% of bids received at the auctions conducted on March 1 and 6, 2024.
It will be recalled that the CBN Governor, Mr. Olayemi Cardoso set out a detailed strategy to curb inflation, stabilise the exchange rate, and spur confidence in the banking system and economy, using last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.
“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” Governor Cardoso said.
“When people understand the real issues and see a strategy and a plan, things tend to calm down. Our objective today is to ensure that the market has supply, that the market functions, and that investors can come in and go out,” he noted.
