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Dollar inflow increases by 94%

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Dollar inflow from foreign investors through the Investors and Exporters (I&E) foreign exchange window rose by 94 percent in the first two months of the year.

In a bid to take advantage of high interest rate on government securities (treasury bills and FGN bonds) and low share price of companies listed on the Nigerian Stock Exchange (NSE), foreign investors injected $3.5 billion through the I&E window from January to February.

This represented 94 percent increase when compared with the $1.8 billion injected in the last three months of last year (fourth quarter of 2018, Q4’18).

Consequently, foreign investors accounted for 63 percent of dollar inflow into the I&E in January and February, up from 23 percent in Q4’18.

The monthly dollar inflow by foreign investors into the window rose from $600 million in Q4’18 to $1.75 billion in the first two months of 2019.

Further analysis however revealed that the dollar inflow from foreign investors was dominated by Foreign Portfolio Investment (FPI), which accounted for 88 percent while Foreign Direct Investment (FDI) accounted for 12 percent of the inflow.

From January to February, foreign investors injected $3.07 billion for FPI, up from $1.63 billion in Q4’18. Similarly, dollar inflow for FDI rose to $430 million between January and February, up from $170 million in the last quarter of 2018 (Q4’18).

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