Dollar inflows into Nigeria’s foreign exchange market fell sharply by 21% as foreign investors scaled back their participation, highlighting renewed pressure on the country’s external financing position.
Data from the Nigerian Foreign Exchange Market (NFEM) show that total dollar inflows declined to about $593.7 million, down from $748.4 million recorded in the previous week. The drop was largely driven by a steep fall in foreign-sourced capital.
Foreign Portfolio Investment (FPI) inflows plunged by nearly 73% to around $46 million, while Foreign Direct Investment (FDI) fell by more than 80% to roughly $7 million. The sharp contraction meant that foreign investors accounted for less than a fifth of total FX inflows during the period, signalling a cautious offshore stance toward Nigeria’s economic outlook.
With foreign participation weakening, domestic sources dominated FX supply, contributing over 80% of total inflows. These included local corporates, exporters, individuals, and interventions by the Central Bank of Nigeria (CBN).
Despite the decline in inflows, the naira posted a slight gain at the official market, supported by CBN interventions aimed at improving liquidity and stabilising the exchange rate. However, the currency remained under pressure in the parallel market, reflecting persistent dollar demand and structural supply constraints.
Analysts say the latest figures underscore the fragility of Nigeria’s FX market, warning that while local inflows and central bank support may offer short-term relief, sustainable currency stability will depend on rebuilding foreign investor confidence, strengthening macroeconomic fundamentals, and ensuring consistent policy implementation. Visit www.jocomms.com for more news.