CBN Records 55% Net FX Flows of $25.4bn in H1 2024

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has said it recorded a 55 per cent net foreign exchange (FX) flow of $25.4 billion in the first six months of 2024.

This came as it offered $876 million to clear bids submitted by customers at an auction concluded on Wednesday, August 7, 2024.

According to a statement, the apex bank said this was the latest testament to its ongoing commitment to support the proper functioning of the foreign exchange market by enhancing liquidity when necessary.

The CBN said the move is in line with its pledge to provide transparent access to foreign exchange for all legitimate customers, it has introduced an additional mechanism through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users.

“This approach aims to foster a more transparent market, reducing information asymmetry and supporting price discovery. It complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of foreign exchange has been sold to authorised dealers in the last three weeks,” the statement said.

“The CBN’s policy objectives are yielding tangible results and bolstering market confidence. Net foreign exchange flows rose to $25.4 billion between January and June, marking a 55% year-over-year increase.

“This growth has been driven by a rise in capital importation, which reached $6 billion in June 2024, and record inflows from diaspora remittances through formal channels.

“The foreign exchange market is also showing signs of improvement and increased depth, with more robust and diversified sources of liquidity contributing to the sustained convergence of exchange rates across all segments of the market.

“The official market recorded a turnover of $43 billion in customer transactions by the end of July 2024, with CBN-supplied liquidity representing less than 5% of total market activities.

“The CBN remains steadfast in its commitment to fostering a transparent, market-driven foreign exchange market, and it will continue to strengthen the market’s capacity to meet the needs of all legitimate participants,” it added.