Figures from the CBN economic report for the third quarter ended September 30 2018 show aggregate foreign exchange inflow into the economy amounted to US$26.01 billion at end-September 2018, indicating a decrease of 20.3 per cent and 3.7 per cent, compared to the levels in the second quarter of 2018 and the corresponding period of 2017, respectively.

The development was as a result of the 6.3 per cent and 30.6 per cent decrease in inflow through the Central Bank of Nigeria and autonomous sources.

Oil receipts up  

Oil sector receipts, which accounted for 14.2 per cent of the total, was US$3.69 billion, compared with US$3.15 billion and US$3.17 billion in the preceding quarter and the corresponding period of 2017, respectively.

Non oil inflow is down  

Non-oil inflow, at US$9.26 billion (35.6 per cent of the total), fell by 13.3 per cent below the level at the end of 2018 second quarter, but rose by 5.1 per cent, over the level at the corresponding period of 2017.

Autonomous inflow fell sharply 

Autonomous inflow, at US$13.06 billion, fell by 30.6 per cent and 13.1 per cent below the levels at end of the preceding quarter of 2018 and the corresponding period of 2017, respectively. Inflow from autonomous sources accounted for 50.2 per cent of the total.

Aggregate outflow is up 

Aggregate foreign exchange outflow from the economy, at US$17.83 billion, rose by 25.6 per cent and 75.3 per cent, above the levels in the preceding quarter and the corresponding period of 2017, respectively. The development reflected, mainly, the rising outflow through the Bank.

Thus, foreign exchange flows through the economy resulted in a net inflow of US$8.18 billion in the review quarter, compared with US$18.44 billion and US$16.85 billion in the second quarter of 2018 and the corresponding period of 2017, respectively.

Likely reasons for the decline

A hike in the United States interest rates may have led to foreign investors reducing their holdings. Upcoming elections have also led to investors pulling out of the equity and fixed income markets.

Reserves are feeling the pinch 

The increased outflow may have led to a decline in foreign reserves. Gross external reserves was US$42.61 billion at end-September 2018. This indicated a decrease of 9.6 per cent below the level in the second quarter of 2018.

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