Comercio Partners: CBN FX Reforms Attracted $500 FPIs in Latest Treasury Bills Auction

Nume Ekeghe

Co-Managing Partner at Comercio Partners, Stephen Osho has indicated that the recent foreign exchange reforms implemented by the Central Bank of Nigeria (CBN) are already attracting Foreign Portfolio Investors (FPIs) back into the country.

Osho highlighted that the latest Treasury Bills auction, with rates reaching as high as 19 per cent, saw FPIs participating, infusing approximately $400 to $500 million of fresh investments into Nigeria.

He disclosed this at a media parley in Lagos where the investment firm presented its macroeconomic outlook for 2024 themed, “Finding Rain in Drought.”

Speaking on recent FX reforms, Osho said: “With recent reforms, a lot of offshore investors are interested, talking to a lot of international banks you would see that they have started seeing some flows of offshore investors. In the last auction alone, we saw close to about $400 to $500 million that came in as fresh money.

“And what made that happen is that they have confidence that we are almost at the end of FX crisis and stability. If all the other mechanisms work, we would start to see a slight appreciation of the currency and that is good if they are buying yields of 22 per cent.

“We need to sustain that momentum and give that confidence to FPIs so that by the time FPIs are in the system and coming in more, you will now see other investments come in through direct investment in the country. Foreign Direct Investors (FDIs) would be more comfortable in the country when they see that is stability in the exchange rate.”

Investment Research Associate at Comercio Partners, Ifeanyi Uba, shared the firm’s projection for the naira’s performance in the first half of the year. Uba noted that they anticipate the naira to hover around the range of N1,500 to N1,600.

Uba said: “The projection we have for the naira is for 6 months and what we are seeing from the CBN and from the parallel we believe the naira may consolidate around N1,500 to N1,600 region for the next couple of months. We have noticed that there is increase in participation in the NAFEM window and the NAFEM window is now showing a true reflection of how market participants feel.”