The total amount of foreign exchange inflow into the economy in the third quarter of 2020 stood at $21.46 billion, according to data from the Central Bank of Nigeria (CBN).

The CBN, in its third quarter economic report, however, said aggregate forex inflow to the economy declined by 2.2 per cent and 30.4 per cent below $21.95 billion and $30.83 billion in the preceding quarter and corresponding quarter of 2019, respectively.

Besides, compared with the respective levels in the preceding and corresponding quarter of 2019, forex outflow also fell by 14.42 per cent and 57.3 per cent respectively to $7.70 billion in the review period.

The development was attributed to the decline in outflow through the central bank and autonomous sources for most of the period in the review quarter.

It explained that the lull in economic activities led to lower demand for forex.

“However, the overall foreign exchange flow through the economy resulted in a net inflow of $14.05 billion, indicating increases of 5.7 per cent and 4.1 per cent over the net inflow of $13.29 billion in the preceding quarter and $13.50 billion in the corresponding quarter of 2019, respectively.

The development was attributed to the gradual easing of the partial lockdown and improvement in economic activities in the third quarter of 2020,

it stated.

The report showed that forex inflow through the CBN decreased in the third quarter of 2020, largely due to a reduction in non-oil inflow.

During the review period, aggregate forex inflow through the CBN stood at $6.97 billion, a decrease of 30.7 per cent and 43.6 per cent below the levels in the second quarter of 2020 and the corresponding quarter of 2019, respectively.

The development was attributed to a decline in both oil and non-oil receipts by 9.7 per cent and 44.7 per cent respectively, below the levels in the preceding quarter and corresponding quarter of 2019.

The decrease in non-oil receipts followed reversion to normal trend after the one-off International Monetary Fund (IMF) facility in the previous quarter, while that of oil receipts was as a result of the weak global demand for crude oil, owing to fragile global economic recovery.

Disaggregation of inflow through the bank indicated that oil and non-oil receipts were $2.35 billion and $4.62 billion, respectively.

Further analysis of non-oil receipts showed that interbank swaps, other official receipts, and Treasury Single Account (TSA) and third-party receipts increased by 255.6 per cent, 40.4 per cent and 6.8 per cent to $1.60 billion, $0.99 billion and $0.95 billion over their respective levels in the second quarter of 2020.

However, foreign exchange purchases, deposit money banks’ cash receipts and unutilised IMTO funds, declined by 14.9 per cent, 68.1 per cent and 11.5 per cent to $0.56 billion, $0.10 billion and $0.24 billion, below the levels in the preceding quarter, respectively.

Unutilised funds from FX transactions, returned payments and interest on reserves and investments fell to $0.09 billion, $0.02 billion and $0.06 billion, respectively, below the levels in the preceding quarter,

the report added.

On the other hand, aggregate forex outflow through the CBN declined by 12.6 per cent, from $7.95 billion in the second quarter of 2020, to $6.95 billion in the third quarter of 2020.

The decline was due to the lull in economic activities arising from the COVID-19 lockdown and subsequent reduction in forex.

Justin Nwosu

Justin Nwosu is the founder and publisher of Flavision. His core interest is in writing unbiased news about Nigeria in particular and Africa in general. He’s a strong adherent of investigative journalism, with a bent on exposing corruption, abuse of power and societal ills.