CBN reports $3.98bn FX net flow loss in Q3

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Stories by Kayode Tokede

The Central Bank of Nigeria (CBN) has reported a foreign exchange net flow loss of $3.99 billion in third quarter (Q3) of 2018.

The apex bank in its economy economic report for Q3 of 2018 stated that aggregate outflow in the quarter under increased review as against inflow that decreased.

The report by CBN disclosed that $16.9 billion aggregate outflow was reported in Q3 of 2018 while inflow aggregate foreign exchange inflow amounted to $12.95 billion, brining the foreign exchange net flow to a loss of $3.98billion in Q3.

As gathered by our correspondent, this is the first time CBN since fourth quarter of 2016 will be reporting a net flow loss.

Further findings by our correspondent revealed that, $13.29 billion was aggregate foreign exchange outflow in Q2 of 2018 as against $13.8 billion reported in Q2 of 2018.

However, in the first quarter of 2018, the aggregate foreign exchange inflow was $14.2 billion while outflow was $9.65 billion, translating into $4.5 billion gain in foreign exchange net flow.

However, the Q3 report by CBN stated that, “despite the decline in domestic oil production, there was improvement in foreign exchange revenue from oil export in Q3 of 2018, on account of the favourable international price of crude oil.

“The development was, however, moderated by the significant decline in inflow from non-oil exports.”

“Aggregate outflow through the CBN amounted to $16.93 billion in the Q3 of 2018. This represented 27.4 per cent and 81.3 per cent increase, above $13.29 billion and $9.34 billion in the preceding quarter and the corresponding period of 2017, respectively.

“The increase in outflow relative to the preceding quarter was attributed to 32.2 per cent and 28.0 per cent increase in public sector payments and interventions in the foreign exchange market.”

The report stated that a net outflow of $3.98 billion was recorded through the Bank, compared with $0.53 billion and $2.64 billion in the second quarter of 2018 and the corresponding period of 2017, respectively.

The report stated that aggregate foreign exchange inflow into the economy amounted to $26.01 billion at end-September 2018, indicating a decrease of 20.3 per cent and 3.7 per cent, compare to the levels in the second quarter of 2018 and the corresponding period of 2017, respectively.

The development, according to CBN report was as a result of the 6.3 per cent and 30.6 per cent decrease in inflow through apex bank and autonomous sources.

The report by CBN on oil sector receipts, disclosed that 14.2 per cent of the total, was $3.69 billion, compared with $3.15 billion and $3.17 billion in the preceding quarter and the corresponding period of 2017, respectively.

“Non-oil inflow, at $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, at $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,” the report by CBN stated.

The report added that, “Aggregate foreign exchange outflow from the economy, at $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 $8.18 billion in the review quarter, compared with $18.44 billion and $16.85 billion in the second quarter of 2018 and the corresponding period of 2017, respectively.”

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