Forex Inflow rises to US$91bn

By Andy Nssien

Aggregate foreign exchange inflow into the economy rose by 45.0 per cent

to US$91.00 billion in 2017, compared with US$62.75 billion in 2016.

A disaggregation showed that inflows through the  Central Bank of Nigeria (CBN) and autonomous sources were US$42.17 billion and US$48.33 billion, constituting 46.3 and 53.7 per cent respectively of the total,  the just released draft of the 2017 CBN annual report has indicated.

.A further analysis showed that foreign exchange inflow through the CBN

rose to US$42.17 billion, compared with US$21.07 billion in 2016.

A breakdown of foreign exchange inflow through the CBN showed that earnings from

crude oil export increased by 1.9 per cent to US$10.37 billion, above the level

in 2016.

The development was attributed to price and output of crude, both

of which rose relative to the preceding period.

Similarly, the non-oil component of the inflow through the Bank rose by 192.2 per cent to US$31.80 billion in 2017, above the level in the preceding year.

This was due mainly to increase in foreign exchange purchases; government debt

proceeds; securities lending cash collateral; and treasury single account (TSA) and third party receipts.

Further analysis of non-oil inflow through the CBN indicated increase in cash

swap in respect of  bureau de change (BDC},wasUS$1.92 billion; unutilised funds from foreign

exchange transactions, US$1.37 billion; returned payments (wired/cash),

US$1.15 billion; return of unutilised International Money Transfer Organisations

funds, US$1.02 billion and interest earning on reserves and investment,US$0.33

billion, compared with US$48.70 million, US$142.10 million, US$287.42 million,

US$94.55 million and US$221.05 million, respectively, in 2016.

Swaps and other official receipts, however, fell to US$2.93 billion and US$2.48 billion,respectively.

 According to the report, inflow through autonomous sources rose by 17.1 per cent above the level in 2016.

 A further analysis showed that inflow through autonomous sources

comprised: invisibles, US$46.21 billion; non-oil export receipts by banks,

US$2.53 billion; and external account purchases, US$0.09 billion, constituting

94.6, 5.2 and 0.2 per cent, respectively, of the total.

Of the invisibles, over-the-counter (OTC) purchases and domiciliary account were US$26.38 billion (57.1%) and US$19.83 billion (42.9%), respectively. A breakdown of OTC

purchases showed that: capital importation,US$12.40 billion; other OTC

purchases,US$11.17 billion; oil companies, US$1.70 billion; and home

remittances, US$1.10 billion.

Aggregate foreign exchange outflow, from the economy, increased by 31.8

per cent to US$33.68 billion, above the US$25.55 billion in 2016. Of this

amount, outflow through the CBN accounted for 90.7 per cent, while

autonomous sources explained the balance.

Foreign exchange outflow, through the CBN, increased by 31.9 per cent to US$30.55 billion, compared with US$23.16 billion in the preceding year. This was attributed,

mainly, to increased intervention by the Bank in the inter-bank and BDC segments of

the foreign exchange market. A breakdown of foreign exchange

outflow, through the CBN, indicated that 3^rd party ministries, departments and agencies (MDA) transfers, external debt service and drawings on letters of credit, at US$2.68 billion, US$0.42 billion and US$0.36 billion,increased by 27.8, 20.3, and 139.2 per cent, respectively, above the

levelsin 2016.

A disaggregation of foreign exchange supply to the market indicated that: inter-bank forwards amounted to US$10.54 billion; inter-bank sales, US$5.60

billion; BDC sales, US$4.16 billion; and matured swaps contract, US$1.11 billion.

Other official payments rose by 24.1 per cent to US$5.43 billion, attributed to

increase in miscellaneous and estacode payments ofUS$2.99 billion and US$0.23 billion,

compared with US$0.21 billion and US$0.13 billion, respectively, in 2016.

However, Joint Venture Company (JVC) cash calls arrears fell by 26.3

per cent to US$2.21 billion, below  the level of US$3.00 billion in 2016. Outflow

through autonomous sources rose by 30.9 per cent, above the level in 2016,

to US$3.13 billion, out of which payments for invisibles and import were US$2.54 billion and US$0.59 billion, respectively.

Overall, the economy in 2017 recorded a net inflow of US$57.32 billion,

compared with US$37.19 billion in 2016. The CBN also recorded a net inflow of

US$11.62 billion, in contrast to

a net outflow of US$2.10 billion in 2016, the report added.