Dramatic turnaround in fx availability

Data published in the CBN’s Economic Report Fourth Quarter 2017 confirm the continuing dramatic improvement in fx liquidity. Our chart shows the quarterly inflows and outflows through the CBN while the commentary in the report covers autonomous (ie non-CBN) movements. The split for total inflows in Q4 was 48% CBN and 52% autonomous, and for total outflows a very different 91% CBN and 90% autonomous. The autonomous inflows are mostly capital importations including the transactions of the offshore portfolio community.

  • CBN inflows of US$14.71bn in Q4 2017, the highest for at least two years, consisted of US$3.23bn from oil and US$11.48bn from the non-oil public sector.
  • This sharp increase in CBN (and autonomous) inflows has allowed the central bank to channel fx into the economy through regular, sizeable sales to the interbank market (forward and spot), and to the bureaux de change.
  • Outflows through the CBN in Q4 of US$8.38bn were 80% ahead of the comparable year-earlier period. This was to be expected, given the prevailing fx scarcity until the opening of the NAFEX window in April 2017. However, they were also 10% lower than the previous quarter, which the commentary explains as the result of lower special payments, drawings on letters of credit, external debt service and inter-bank utilization.

  • The net inflow in Q4 reached US$6.33bn for the CBN and US$21.26bn for all transactions. The last net outflow dates from Q3 2016.
  • In passing, the commentary also notes an overall balance-of–payments surplus equivalent to 2.2% of GDP in the quarter.

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