$309 million flows into Nigeria’s forex market in one trading day

The Nigerian foreign exchange market recorded an inflow of $309 million on Monday — a considerable surge from Friday’s transactions.

Bola Onadele, head of market regulator, FMDQ OTC securities exchange, told Reuters that the trade included one $270 million transaction at 345 naira per dollar, by foreign investors buying local currency bonds.

The inflow of forex saw the Nigerian naira firm from its opening 319.50/$1 earlier in the day to 315.50 per dollar.

The Nigerian forex market had experienced an artificial dollar scarcity over the past week, following the decision of the Central Bank of Nigeria (CBN) to cut nine deposit money banks from the market.

The banks were banned, following a breach of Treasury Single Account (TSA) guidelines by the lenders.

United Bank for Africa (UBA) was readmitted into the forex market after the regulator confirmed it had remitted all Nigeria National Petroleum Corporation (NNPC) funds into the TSA.

Eight other lenders stand suspended until they remit the funds worth about $2.1 billion back to TSA.

The fresh inflows are expected to boost liquidity and ease the pressure on the naira.