Foreign exchange inflows from domestic sources have reached their highest level in six years, according to a report by the Central Bank of Nigeria (CBN). The increase reflects a growing confidence in the Nigerian economy and the impact of recent macroeconomic reforms by the federal government. The CBNs latest report revealed that foreign exchange inflows into the Nigerian Foreign Exchange Market (NFEM) surged to $5.96 billion in May 2025, representing a 62 per cent increase from $3.67 billion in April. Of this total, 83.2 per cent, $4.96 billion came from domestic sources, marking the highest domestic contribution to forex inflows since 2019. The growth was primarily driven by a sharp rise in contributions from exporters and importers, which jumped from $655.7 million to $3.11 billion. Inflows from non-bank corporates also rose from $1 billion to $1.11 billion, while individual inflows surged from $15.1 million to $91.4 million. Conversely, the CBNs own contribution fell significantly from $1.35 billion to $649.8 million over the same period. Foreign sources accounted for 16.8 per cent of total inflows, rising by 51.7 per cent from $657.4 million to $997.6 million, the highest level in three months. Inflows from foreign portfolio investors climbed by 61.3 per cent to $880.8 million, while other foreign corporates contributed $83.9 million, up 10 per cent. However, foreign direct investments declined slightly by 6.3 per cent to $32.9 million. The CBN also released its latest Purchasing Managers Index (PMI) report, which showed continued business expansion. The composite PMI stood at 52.1 points in May, just below the 52.2 recorded in April. All sectors remained in expansion territory, with agriculture at 53.4, industry at 51.6, and services at 51.7. Analysts at Cordros Capital said the rise in business activity and forex inflows was due to an improving macroeconomic outlook. Looking ahead, we expect sustained expansion in private sector activity, underpinned by improving macroeconomic fundamentals such as a more stable naira and moderating inflation. Nonetheless, tight financial conditions remain a potential headwind to broader economic performance in the near term, the firm stated. President Bola Tinubus macroeconomic reforms have drawn widespread praise from business leaders and international analysts. Africas richest man, Alhaji Aliko Dangote, commended the Presidents efforts, saying, Your leadership has been both decisive and reassuring. Your actions have reignited hope for a prosperous Nigeria of today and of the future. He highlighted the administrations removal of fuel subsidies, unification of the naira exchange rate, and pro-Nigeria industrial policy as key achievements. From the very start of the administration, Your Excellency has worked tirelessly to foster an enabling environment for private sector-led growth, Dangote added. Chairman of BUA Group, Alhaji Abdulsamad Rabiu, also praised the administrations performance. Under your leadership, we have witnessed real and rapid progress, he said, pointing to the governments infrastructure initiatives and policy reforms. On the global front, credit rating agencies have noted the positive impact of Nigerias economic reforms. Moodys Investors Service recently upgraded Nigerias sovereign rating from Caa1 to B3, citing a more resilient fiscal position, stronger external accounts, and the governments demonstrated commitment to macroeconomic and structural reforms. Fitch Ratings followed suit in April 2025, upgrading Nigerias rating from B- to B and declaring a stable outlook. The agency credited the administration for improved policy coherence, foreign exchange liberalisation, and progress toward eliminating fuel subsidies. These have improved policy coherence and credibility and reduced economic distortions and near-term risks to macroeconomic stability, enhancing resilience in the context of persistent domestic challenges and heightened external risks, Fitch said.The post CBN reports highest domestic forex inflow in six years appeared first on Linda Ikeji Blog.CBN reports highest domestic forex inflow in six years
Foreign exchange inflows from domestic sources have reached their highest level in six years, according to a report by the Central Bank of Nigeria (CBN). The increase reflects a growing confidence in the Nigerian economy and the impact of recent macroeconomic reforms by the federal government. The CBNs latest report revealed that foreign exchange inflows into the Nigerian Foreign Exchange Market (NFEM) surged to $5.96 billion in May 2025, representing a 62 per cent increase from $3.67 billion in April. Of this total, 83.2 per cent, $4.96 billion came from domestic sources, marking the highest domestic contribution to forex inflows since 2019. The growth was primarily driven by a sharp rise in contributions from exporters and importers, which jumped from $655.7 million to $3.11 billion. Inflows from non-bank corporates also rose from $1 billion to $1.11 billion, while individual inflows surged from $15.1 million to $91.4 million. Conversely, the CBNs own contribution fell significantly from $1.35 billion to $649.8 million over the same period. Foreign sources accounted for 16.8 per cent of total inflows, rising by 51.7 per cent from $657.4 million to $997.6 million, the highest level in three months. Inflows from foreign portfolio investors climbed by 61.3 per cent to $880.8 million, while other foreign corporates contributed $83.9 million, up 10 per cent. However, foreign direct investments declined slightly by 6.3 per cent to $32.9 million. The CBN also released its latest Purchasing Managers Index (PMI) report, which showed continued business expansion. The composite PMI stood at 52.1 points in May, just below the 52.2 recorded in April. All sectors remained in expansion territory, with agriculture at 53.4, industry at 51.6, and services at 51.7. Analysts at Cordros Capital said the rise in business activity and forex inflows was due to an improving macroeconomic outlook. Looking ahead, we expect sustained expansion in private sector activity, underpinned by improving macroeconomic fundamentals such as a more stable naira and moderating inflation. Nonetheless, tight financial conditions remain a potential headwind to broader economic performance in the near term, the firm stated. President Bola Tinubus macroeconomic reforms have drawn widespread praise from business leaders and international analysts. Africas richest man, Alhaji Aliko Dangote, commended the Presidents efforts, saying, Your leadership has been both decisive and reassuring. Your actions have reignited hope for a prosperous Nigeria of today and of the future. He highlighted the administrations removal of fuel subsidies, unification of the naira exchange rate, and pro-Nigeria industrial policy as key achievements. From the very start of the administration, Your Excellency has worked tirelessly to foster an enabling environment for private sector-led growth, Dangote added. Chairman of BUA Group, Alhaji Abdulsamad Rabiu, also praised the administrations performance. Under your leadership, we have witnessed real and rapid progress, he said, pointing to the governments infrastructure initiatives and policy reforms. On the global front, credit rating agencies have noted the positive impact of Nigerias economic reforms. Moodys Investors Service recently upgraded Nigerias sovereign rating from Caa1 to B3, citing a more resilient fiscal position, stronger external accounts, and the governments demonstrated commitment to macroeconomic and structural reforms. Fitch Ratings followed suit in April 2025, upgrading Nigerias rating from B- to B and declaring a stable outlook. The agency credited the administration for improved policy coherence, foreign exchange liberalisation, and progress toward eliminating fuel subsidies. These have improved policy coherence and credibility and reduced economic distortions and near-term risks to macroeconomic stability, enhancing resilience in the context of persistent domestic challenges and heightened external risks, Fitch said.The post CBN reports highest domestic forex inflow in six years appeared first on Linda Ikeji Blog.
