Nigeria's FX Market Sees 21% Decline in Dollar Inflows Amid Foreign Investor Retreat

Dollar inflows into Nigeria's official foreign exchange market dropped sharply by 21% last week, with total inflows declining to $593.70 million from $748.40 million the previous week. A research report by Coron Merchant Bank revealed significant plunges in foreign portfolio inflows (FPI) and foreign direct investment (FDI), indicating external pressures on Nigeria's economy.

The decline in FPI by 72.91% to $46 million and FDI by 81.87% to $7 million raised concerns about global investors' caution towards Nigeria's macroeconomic policies. The country's reliance on central bank interventions and local sources for FX inflows was emphasized, with the naira appreciating in the official window but weakening in the parallel market.