As international investors remain cautious, inflows through the Investors and Exporters window (I&E) fell by 65.7% month on month in July.
According to FMDQ data, foreign exchange inflows into the I&E end of the market fell from $1.77 billion in June to $608.00 million in July, the lowest level since April 2021, when an inflow of $564.20 million was reported.
Similarly, activity at the I&E window fell 10.1% week on week to $389.1 million last week, with the FMDQ Securities Exchange FX Contract Market slowing down as the total amount of open contracts remained at $6.3 billion.
Based on traders, the suspension was caused by the Central Bank of Nigeria's (CBN) decision to temporarily deactivate all contracts with maturities ranging from one to twelve months as part of its ongoing reforms. Data from the previous month revealed that both domestic and overseas investment inflows had decreased.
In particular, inflows from domestic investors fell by 60.6 percent month on month to $561.00 million in July, compared to $1.42 billion in June.
Inflows from the CBN had fallen by 70%, while those from non-bank corporates and exporters had fallen by 65.6 and 63.9%, respectively. Individual inflows had also decreased by 51.2% in July.
Foreign inflows remained poor, falling by 86.5% to $47 million in July as foreign investors remained apprehensive about returning in large numbers despite the foreign exchange market reform, as FX backlogs remained uncertain.
Read more: https://www.investingport.com/forex-liquidity-decline-to-21-month-low/