Cbn Says Forex Demand Falls By $9 Billion Dollars.

Central Bank of Nigeria says the demand for foreign exchange by individuals and companies seeking to do importation and other forex-related activities fell 42 per cent year-on-year.

An analysis of the total sectoral utilization of foreign exchange revealed that 19 sectors and services received $21.12 billion dollars forex allocation in 2023 with a reduction of 41.9 per cent or $8.87 billion dollars from the $29.98 billion dollars disbursed to the industry players in 2022.

The financial metrics were contained in the quarterly statistics report of by the CBN, while, the Forex allocation refers to the process through which the CBN distributes foreign exchange to various sectors of the economy, including individuals, businesses, and government agencies, based on certain criteria and priorities.

This is coming after in June 2023, the CBN adopted a floating exchange rate system for the naira, unifying all forex market segments, consequently leading to a notable depreciation of the domestic currency against the United States dollar and other global currencies.

Financial experts also suggested that the scenario might indicate insufficient forex liquidity from the central bank, leading dollar buyers to turn to the parallel market, and the sectors include the industrial sector, transport sector, as well as the agricultural sector, and oil sector