Foreign exchange inflows to Nigeria’s economy declined by 25 per cent in April 2020 to $9.7bn from $12.9bn in March 2020.
According to the Central Bank of Nigeria’s economic report for April, this was due to the weak global demand for oil on account of COVID-19 pandemic.
Oil receipts fell sharply by 15.5 per cent during the review period due to a 56 per cent plunge in average crude oil price to $14.30 per barrel in April from $32.30 per barrel in March.
Similarly, forex outflows fell by 55 per cent to $3bn from $6.7bn during the period. The decline was driven largely, by the 69.3 per cent decline in interbank demand, reflecting substantial decline in Investors and Exporters funding and the CBN non-intervention in the bureau de change segment last April.
The report stated, “The weak global demand on account of COVID-19 led to a 25.0 per cent decline in inflow of foreign exchange into the economy in April 2020.
“On a month-on-month basis, foreign exchange inflows, through the economy, declined by 25.0 per cent to $9.72bn in April 2020.
The decline in inflows, relative to the level in March 2020, was attributed to the lower receipts from oil sources, which fell sharply by 15.5 per cent as a result of the plunge in average crude oil price from $32.30 per barrel in March 2020 to $14.30 per barrel in April 2020.
The slump in crude oil price was induced by the weak global demand on account of the lockdown of most economies following the continued spread of COVID-19.
“Inflow through autonomous sources, particularly invisible purchases, declined by 57.3 per cent to $3.78bn, relative to the preceding month, but higher than the 44.1 per cent increase in inflows through the CBN, which stood at $5.94bn in April 2020.”
On forex outflows it stated, “Following the lockdown of the Nigerian economy, aggregate foreign exchange outflows through the economy decreased by 55.1 per cent to outflows $3.29bn in April 2020, below the level in the preceding month.
The development was driven, largely, by the 69.3 per cent decline in interbank utilisation, reflecting substantial decline in I&E funding and non-intervention in the BDC segment in April 2020.
Similarly, outflow through autonomous sources, mainly imports and “invisibles,” declined by 62.2 per cent to $0.13bn in April 2020, below the level in March 2020.
Consequently, a net inflow of $6.43bn was recorded through the economy in April 2020, compared to the net inflow of $5.63bn in the preceding month.
