The Nigerian Customs Service (NCS) has reported a significant decrease in the exchange rate used for customs import duties and cargo clearance, marking the fifth consecutive decline in less than two weeks. The rate has fallen from N1,612 per dollar on March 15th to N1,405.46 per dollar presently.
In an effort to maintain transparency and alignment with market dynamics, the NCS had previously announced that the exchange rate for duty collection and cargo clearance would be determined by the Central Bank of Nigeria (CBN), based on the official market rate.
Here’s a brief overview of the recent rate adjustments:
– March 15, 2024: N1,612 per dollar
– March 16, 2024: N1,593 per dollar
– March 19, 2024: N1,572 per dollar
– March 23, 2024: N1,448 per dollar
– March 27, 2024: N1,405.46 per dollar
These fluctuations reflect a strengthening of the naira against other currencies in both the parallel and official foreign exchange markets. Notably, the naira has shown remarkable improvement over the past fortnight, appreciating from N1,615 per dollar on March 13th to N1,382 per dollar by March 26th.
Contributing to this positive trend are recent reforms implemented by the Central Bank of Nigeria (CBN) aimed at fostering market stability and bolstering the local currency.
Last week, the CBN announced the successful clearance of over $4 billion in foreign exchange forwards backlog, providing relief to businesses operating domestically and internationally. Additionally, the bank has introduced measures to regulate the remittance of foreign exchange earnings by International Oil Companies (IOCs), requiring a phased transfer approach to mitigate market volatility.
In further efforts to enhance market transparency and liquidity, the CBN has prohibited commercial banks from diverting foreign exchange sales profits towards operational expenses and dividend payouts. Furthermore, the bank has initiated the sale of dollars to Bureau de Change operators at a fixed rate of N1,251 per dollar.
During its recent Monetary Policy Committee (MPC) meeting, the CBN opted to raise interest rates from 22.75% to 24.75%, signaling a proactive stance against inflation, which presently stands at 31.7%. Mr. Yemi Cardoso, chairman of the committee, emphasized that this adjustment is aimed at maintaining price stability and effectively managing the foreign exchange market.
As these reforms continue to unfold, stakeholders remain optimistic about the prospects for sustained economic stability and growth in Nigeria.
Credit: Nairametrics (Text Excluding Headline)
