Foreign exchange inflows through the Investors and Exporters (I&E) foreign exchange window hit the $50 billion at the end of February. This huge inflow was instrumental to the stability of the naira against the dollar since 2017.

The Investors and Exporters (I&E) forex window allows investors and exporters to purchase and sell foreign exchange at the prevailing market rate. Prior to the introduction of the I&E window on April 2017, the nation’s foreign exchange market was bedevilled with acute shortage of supply of foreign exchange due to apathy of foreign investors who exited the nation’s financial markets in droves in the wake of the sharp decline in the nation’s external reserve caused by sharp decline in crude oil prices between starting from July 2014. The scarcity triggered sharp depreciation of the naira with the exchange rate rising to N520 per dollar in February 2017, while the gap between the official exchange rate and the parallel market rate rose to 70 percent.

The I&E forex window was introduced to address these challenges. According to the CBN, the objective of the window is to boost liquidity in the foreign exchange market and ensure timely execution and settlement for eligible transactions. In a circular issued on April 21, 2017 introducing the window, the CBN stated that, “Eligible transactions in the window include: Invisible transactions (excluding International Airlines Ticket sales’ remittances), Loan repayments, loan interest payments, dividends/income remittances, capital repatriation, management services fees, consultancy fees, etc; Bills for collection and; Any other trade-related payment obligations (at the instance of the customer).”

The apex bank further stated that, “The supply of foreign currency to the window shall be through portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange to Naira. The CBN shall also be a market participant at this window to promote liquidity and professional market conduct.” Transactions in the window commenced on Monday April 24, while the FMDQ introduced the Nigeria Autonomous Foreign Exchange Rate (NAFEX) as reference rate for the window. Cautious Optimism However the introduction of the I&E forex window was greeted with cautious optimism and apprehension due to liquidity concerns and sustainability of the structure of the market. In addition to these was anxiety over the direction of exchange rate in the market. This attitude was informed by the 22.6 percent depreciation suffered by the naira in the window in the first week of trading. Compared to the official exchange rate of N305 per dollar, NAFEX opened at N374.25 per dollar and closed at N374.96 per dollar, hence 22.6 per cent naira depreciation in the first day of trading. By the close of the first week, the naira suffered further depreciation in the window with NAFEX rising further to N379 per dollar. The mood among banking experts was captured in a commentary on the introduction of the window, by Ecobank research analysts, Mr. Kunle Ezun and Mr. Kenneth Asenime. They noted: “In the immediate, forex supply to the market is expected to rise, possibly by around 75 per cent, as portfolio Investors and Exporters (who hitherto are not disposed to the official market due to pricing) re-enter the market, which in turn will improve liquidity and strengthen the naira. “However, the lack of communication on the restricted items on the exclusion list could further limit the positive impact introduced by the regulatory change on the market, requiring another regulatory change by the CBN to correct imbalances. “Over all, the impact of the circular would largely depend on how much flexibility, transparency and liquidity the CBN is willing to inject to support the FX spot market. As such, the CBN might need to intervene more in the interbank FX spot market and other segments of the FX market.” Also speaking at the Access Bank FX2017 seminar, which focussed on the introduction of the I&E forex window, Access Bank’s Group Managing Director/Chief Executive, Mr. Herbert Wigwe said: “We as regulators, market participants and businesses should sit down together to understand the modus operandi of the recently introduced forex markets and how it will impact on our businesses going forward.”

“We are beginning to see inflows into the market, it is still very early days yet, but at least we are beginning to see semblance of inflows. We must work together to strengthen this market in which we do business.” However within one month of its introduction the I&E forex window gained confidence and credibility due to transparency of its operations visi-a-vis the determination of the ruling exchange rate, with the volume of dollars traded in the window rising to $1 billion per week in the first month of its introduction. This led to commendation by global rating agency, Fitch Ratings, which stated: “NAFEX provides investors and exporters with a more transparent mechanism through which they can sell foreign currency to willing buyers. Authorised banks act as intermediaries, clearing funds supplied by portfolio investors and exporters and ensuring timely execution of settlement for buyers. “Despite its short record, volumes transacted through NAFEX are growing. In our opinion, NAFEX offers a more transparent alternative to accessing FC than is available through the other foreign-exchange markets in the country. Several exchange rates operate in Nigeria.” Performance and Impact Vanguard analysis showed that the foreign exchange inflow through the I&E forex window has been growing. From April 2st when the window commenced operations to December 31st 2017, $24 billion was traded in the window, while foreign investors, exporters and other non CBN players injected $6 billion. Further analysis showed that in 2018, the I&E forex window attracted $33.34 billion inflows with, foreign investors, exporters and other non CBN players injecting $23.89 billion. The impact of these huge inflows is reflected in the steady increase in the nation’s external reserves. From $30.8 billion at the end of April 2017, a week after the I&E forex window was introduced, the reserves rose steadily to a peak of $48 billion at the end of May 2018. The steady growth in the nation’s external reserves also led to appreciation of the naira in the nation’s foreign exchange market, which culminated to the convergence of the parallel market exchange rate and the I&E forex window rate within the first six months of the window. Responding to increased dollar supply to bureaux de change (BDCs) by the CBN, the naira appreciated to N360 per dollar on Friday November 2nd, 2017 from N390 per dollar at the end of April. On the same day I&E forex window exchange rate dropped to N360.57 per dollar, from the opening rate of N374.25 on April 24th, 2017, implying convergence of the exchange rates. Since then the naira exchange rate has been stable within the range of N360 per dollar and N363 per dollar in the parallel market and in the I&E forex window. Another beneficiary of the I&E forex window is the Nigerian Stock Exchange (NSE). Between 2014 and April 2017, the NSE All-Share Index lost 40 of its value due to exit of foreign investors from the stock market. The introduction of the I&E window however encouraged foreign investors to return to the stock market. As a result the NSE All-Share Index gained 39 percent three months after the window was introduced, and by the end of 2017 the index had surged 42 percent. Analysts comment In an interview with Vanguard Newspaper, Managing Director/Chief Executive, Financial Derivatives Company Limited, Mr. Bismarck Rewane commended the I&E forex window. He said: “Compared to where we were before the I&E window, I think the I&E window has done very well. It is the most efficient of the current dispensation. However, if we want an ideal situation it should be that we should head towards an efficient market structure and an efficient rate. The I&E window is nearest to an efficient rate but it is not the answer to a market structure.” President Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe also commended the I&E forex window saying, “The window has impacted positively on increasing level of investors’ confidence in the nation’s foreign exchange market. It has also helped to deepen the foreign exchange market and increased liquidity.” On their part, analysts at Vetiva Capital Management Limited opined that the I&E forex window played a critical role in the nation’s recovery from economic recession. “The NAFEX fixing has been a boom to Nigeria’s forex market, boosting liquidity and price discovery, but also fostering investor confidence in the economy. The improvement in the forex market has been a critical element of Nigeria’s economic recovery”, they said.

Read more at: https://www.vanguardngr.com/2019/03/how-ie-forex-window-buoyed-naira-stability-with-50bn-inflows/

The monetary policies of Mr Godwin Emefiele have pulled Nigeria out of recession. We must commend President Buhari for allowing this man to continue his good work!

You know when President Buhari said he will reduce the exchange rate of dollar from N150/$ to N1/$1 people thought he was delusional. Well he didn't let us know that it will be a task that requires 8years at the helm. Dollar shot up to over N520/$ and people started voicing their frustrations which is understandable, but he has stabilized the rate to N360/$ for two years now at the dismay of speculators. I strongly believe that before the end of his 2nd term, Naira will be 50Kobo/$1, that's not a typo, you read that right, naira will be stronger than the dollar as it was in 1985 when my father used to travel to conventions in Las Vegas and partied like the King of Zamunda. When the white men would open the door of his taxi, pick up his suit cases and ferry him to his delux room. The naira was so strong, my dad will eat king crab legs, drink to his heart fillings and still have change to tip the pretty white bartenders. Although he never gambled, he always enjoyed his trips to Las Vegas. My dad told me several stories and they all had a common theme, 1970s and early 1980s Nigerians were highly sought after by the white man because our currency was strong and we were a thriving nation. This anecdote isn't about my father or am i trying to brag about anything, he was a common man with a currency far stronger than the Dollar and Pounds sterling. While I will never forget the tales of my father, I will also never forget that in 1994 Rashidi Yekini became the first Nigerian to score in the World Cup tournament where we defeated Bulgaria 3-0.

rentAcock:
Wow

Easy bro, why sounding like an ambulance siren



________________________________________________
Still waiting for people to come here and start bashing one another.

If this hits the front page abeg gimme like

$50bn under my bed.

modskiller:


Hi bro, why souding like a siren

That's to save my spot before delving deeper, do you have a problem with it?

How much is it to a dollar now

rentAcock:


That's to save my spot before delving further, do you have a problem with it?

Ma man, LOL, So las las dem go see us for the top posts in the morning abi...

princemillla:
How much is it to a dollar now

They said it will be $1 - #1 about 4 years ago, but they are working on it already...

modskiller:


They said it will be $1 - #1 about 4 years ago, but they are working on it already...

They didn’t tell you when it will be or did they?


The Naira has never been this stable in the history of this country. For 2years running the Nigerian Naira has been rooted to a spot without flunctuation. This kind of stability is what brings investors into the country with confidence that their money wouldn’t loose value overnight.

I'm patiently waiting for the day the dollar will really come down.

Craz de worry your head who was CBN governor when we went into recession ?

hydroking23:
The monetary policies of Mr Godwin Emefiele have pulled Nigeria out of recession. We must commend President Buhari for allowing this man to continue his good work!

Misleading headline...

$50bn dollar inflow, over 100% the amount we have in the reserve and dollar did not crash to N100...

Oh... they meant transacted amount, inflow and outflow, the onus lies on how much was retained. Moreover the major bulk of that transaction rests on the CBN with its dollar push in millions into the forex market on a two weeks basis and massive bonds and bills sales of 2018 at a 14% interest rate.

From April 2st when the window commenced operations to December 31st 2017, $24 billion was traded in the window, while foreign investors, exporters and other non CBN players injected $6 billion.

There it is...

Further analysis showed that in 2018, the I&E forex window attracted $33.34 billion inflows with, foreign investors, exporters and other non CBN players injecting $23.89 billion.

This is when the FG commemced treasury bills and bonds sales in massive scale, the question now is.... When the bonds mature, what is left after we pay back with its interest at 14% which obviously would leave the shores like it came because they chose investment in bills and bonds due to mistrust of our financial policies ?

No hate... just being logical

Bad news crew Ipob unlimited will hate to hear this

Stability of naira while is far below $100 is a great achievement for this government

A standing ovation and a round of applause for Osinbajo and economic team

Watch as the likes of those who drink water from the gutter would come here to praise Buhari cum their god.

Esseite:
Misleading headline...

$50bn dollar inflow, over 100% the amount we have in the reserve and dollar did not crash to N100...

Oh... they meant transacted amount, inflow and outflow, the onus lies on how much was retained. Moreover the major bulk of that transaction rests on the CBN with its dollar push in millions into the forex market on a two weeks basis and massive bonds and bills sales of 2018 at a 14% interest rate.


There it is...



This is when the FG commemced treasury bills and bonds sales in massive scale, the question now is.... When the bonds mature, what is left after we pay back with its interest at 14% which obviously would leave the shores like it came because they chose investment in bills and bonds due to mistrust of our financial policies ?

No hate... just being logical

seems yours is the best analysis here ,the other I read seem not to understand what they are talking about ..

This policy of using foreign reserves to buffer the naira is not a good long term.plan

A thriving local industry is meant to buffer your currency not bi monthly dollar injections

Anyways I wish they get things right this time around

jomoh:


They didn’t tell you when it will be or did they?


The Naira has never been this stable in the history of this country. For 2years running the Nigerian Naira has been rooted to a spot without flunctuation. This kind of stability is what brings investors into the country with confidence that their money wouldn’t loose value overnight.

- Naira that is being cushioned on a 2 weeks basis?
- Confidence and they have not flocked in despite 2 years?
- why then is everyone choosing bills & bonds over direct investment still after two years?

Exodus 23:26b .... I'll make sure you live full and complete lives (Message Translation)


HAPPY BIRTHDAY TO ME!!!

Honestly, I&E window did help many exporters as rate was even higher than blackmarket with few Naira. It makes exporter not to be afraid of opening NXP before transaction and has really Bern helpful.

However, to really make the Naira stronger, exporters needs to be encouraged the more through loans and the NEPC grant.

What Buhari government fails to understand was that Jonathan gave exporters free hand to operate which interns made Naira stable and a bit stronger but he and Emefiele came with wrong policies which backfired. Thankfully, they created that window

The Buhari administration may be slow, but like it or not, it will end up as the best thing that has ever happened to this country in a century

modskiller:


They said it will be $1 - #1 about 4 years ago, but they are working on it already...

That's nice, see my signature for details

Esseite:


- Naira that is being cushioned on a 2 weeks basis?
- Confidence and they have not flocked in despite 2 years?
- why then is everyone choosing bills & bonds over direct investment still after two years?

Cushion with what? Meanwhile how will a strong Naira benefit the economy with our perverted taste for everything foreign?

jomoh:


They didn’t tell you when it will be or did they?


The Naira has never been this stable in the history of this country. For 2years running the Nigerian Naira has been rooted to a spot without flunctuation. This kind of stability is what brings investors into the country with confidence that their money wouldn’t loose value overnight.

but the problem with CBN waitng for foriegn investors now is:


our currency is selling at a premium low.


there is only one way for it to go, if things get better, and that is higher which will depreciate the value of their dollars.


So CBN must focus on building farm, and processing and manufacuting industries within the country without foriegn investments.


this will allow our currency to soar above dollars due to reduced imports & possible increased imports.


BUT ALAS will our national economists & politicians allow Nigeria to be run like a profit seeking business?

Esseite:


[s]Oh... they meant transacted amount, inflow and outflow, the onus lies on how much was retained. Moreover the major bulk of that transaction rests on the CBN with its dollar push in millions into the forex market on a two weeks basis and massive bonds and bills sales of 2018 at a 14% interest rate.

This is when the FG commemced treasury bills and bonds sales in massive scale, the question now is.... When the bonds mature, what is left after we pay back with its interest at 14% which obviously would leave the shores like it came because they chose investment in bills and bonds due to mistrust of our financial policies ?

No hate... just being logical[/s]

Where did you see CBN inject millions into the forex market in this article that emphasized NON CBN inflow to the I&E forex window?

Further analysis showed that in 2018, the I&E forex window attracted $33.34 billion inflows with, foreign investors, exporters and other non CBN players injecting $23.89 billion.

We are talking about transactions in the I&E Forex window so quit trying to conflate issues to deceive and misinform the gullible.

********************************************************

Foreign exchange inflows through the Investors and Exporters (I&E) foreign exchange window hit the $50 billion at the end of February. This huge inflow was instrumental to the stability of the naira against the dollar since 2017.

Brilliant.

TonyeBarcanista the export focus policy we discussed is already yielding fruits .

The Investors and Exporters (I&E) forex window allows investors and exporters to purchase and sell foreign exchange at the prevailing market rate. Prior to the introduction of the I&E window on April 2017, the nation’s foreign exchange market was bedevilled with acute shortage of supply of foreign exchange due to apathy of foreign investors who exited the nation’s financial markets in droves in the wake of the sharp decline in the nation’s external reserve caused by sharp decline in crude oil prices between starting from July 2014. The scarcity triggered sharp depreciation of the naira with the exchange rate rising to N520 per dollar in February 2017, while the gap between the official exchange rate and the parallel market rate rose to 70 percent.

Becoming an export based economy (non oil) is the surest and quickest way to Nigeria's economic prosperity as it will not only improve our balance of trade which will pump up the value of the Naira and reduce the cost of essential imports leading to a fall in inflation rates, but will also lead to multiplier effects including job creation and making our local firms players in the global marketplace.

Reducing our exchange rate volatility and maintaining stability is good news for foreign investors as it means less forex risk and more investor confidence and more $$$ pumped into the economy. Next Level.

Emeifiele, the unpraised hero of the Nigerian economy. He took some of the boldest and sometimes craziest monetary policy moves with the backing of FG, led by tough guy buhari. Since 1999 no cbn governor/FG were able to succesfully diversify our economy by delibrately withholding forex from politicians , smuggglers and importers of rubbish and give same forex at lower rate to manufacturers and agro based producers, he even made cbn funds available to rice ..farmers , manufacturers and SME's

Slowly the non oil sector of the economy is actualy growing quarterly, but then some people blinded by hate cant see the bigger picture

no. Whatever it means

iammo:





Emeifiele, the unpraised hero of the Nigerian economy. He took some of the boldest and sometimes craziest monetary policy moves with the backing of FG, led by tough guy buhari. Since 1999 no cbn governor/FG were able to succesfully diversify our economy by delibrately withholding forex from politicians , smuggglers and importers of rubbish

I think you meant fiscal/monetary policy, because PMBs diversification efforts are focused towards generating revenue/forex from non oil sources like agriculture and solid minerals.

However what I wonder is why most Nigerians seem to know that Osibanjo and Emeifiele are the actual ones in charge of the economy, and praise them whenever there is any favorable economic development, but never fail to vilify and condemn President Buhari once the opposite occurs .

He was indeed vindicated by his landslide victory.

The money no dey go down self?

QuotaSystem:


I think you meant fiscal/monetary policy, because PMBs diversification efforts are focused towards generating revenue/forex from non oil sources like agriculture and solid minerals.

However what I wonder is why most Nigerians seem to know that Osibanjo and Emeifiele are the actual ones in charge of the economy, and praise them whenever there is any favorable economic development, but never fail to vilify and condemn President Buhari once the opposite occurs .

He was indeed vindicated by his landslide victory.

Just when some people where batling with the news of emeifele's sack he was strategizing on How to revolutionalise the local cotton and clothing industry by working out a policy to reduce forexates to the cotton millers and stopping forex to textile importers. I'm glad I support this goverment and many sane Nigerians do

rentAcock:
You know when President Buhari said he will reduce the exchange rate of dollar from N150/$ to N1/$1 people thought he was delusional. Well he didn't let us know that it will be a task that requires 8years at the helm. Dollar shot up to over N520/$ and people started voicing their frustrations which is understandable, but he has stabilized the rate to N360/$ for two years now at the dismay of speculators. I strongly believe that before the end of his 2nd term, Naira will be 50Kobo/$1, that's not a typo, you read that right, naira will be stronger than the dollar as it was in 1985 when my father used to travel to conventions in Las Vegas and partied like the King of Zamunda. When the white men would open the door of his taxi, pick up his suit cases and ferry him to his delux room. The naira was so strong, my dad will eat king crab legs, drink to his heart fillings and still have change to tip the pretty white bartenders. Although he never gambled, he always enjoyed his trips to Las Vegas. My dad told me several stories and they all had a common theme, 1970s and early 1980s Nigerians were highly sought after by the white man because our currency was strong and we were a thriving nation. This anecdote isn't about my father or am i trying to brag about anything, he was a common man with a currency far stronger than the Dollar and Pounds sterling. While I will never forget the tales of my father, I will also never forget that in 1994 Rashidi Yekini became the first Nigerian to score in the World Cup tournament where we defeated Bulgaria 3-0.

are you for real which school did you attend . Chai

Base1line:
Craz de worry your head who was CBN governor when we went into recession ?

I wonder. They love to bash Buhari for the economic recession but praise Emeifiele for the economic recovery. Bigoted hypocrites.

Later the same people will accuse PMB of being a divisive bigot. That's why they're now ignored .