Over the last few months, the Naira has been
relatively stable at the I&E window, supported by elevated crude oil
prices, while the parallel market rate remains pressured due to elevated
demand. Based on the data from FMDQ, the total FPI inflow for May was
US$124.3m, which remains significantly lower than the pre-pandemic level of
c.US$1.5bn monthly. Furthermore, FPI funds which historically contributed about
US$13.4bn on average to the total FX reserve now accounts for about c.US$5.1bn.
This weakened inflow, therefore, explains the low liquidity at the I&E
window, which has averaged US$78.1m in 2021 when compared with the pre-covid
level (first 3 months of 2020) of US$1.7bn.