Last Updated on 18 July 2024 by Naijadazz
In a surprise, the Nigeria Customs Service (NCS) has pegged its exchange rate at N1,584 per dollar for the collection of import duties. This now stands three naira above the official closing rate on the NAFEM window, which as recorded on July 17, 2024, was N1,581.
One of the dynamics that the market continues to see in Nigeria’s foreign exchange landscape is the duties rate— the highest since March 2024. Efforts by the Central Bank of Nigeria to stabilize the situation have seen the Nigerian naira continue facing pressure against major currencies.
There has been an increased activity in the forex market of late. After being dull in the last twelve weeks, the turnover surged by 40% to $1.03 billion in the week on week from $740.92 million. This level of market activity has not been witnessed since early June, when it touched a high of $1.05 billion.
It has been intervening vigorously behind the scenes, the CBN. In two days, the apex bank sold a total of $122.67 million to 46 authorised dealers. On Wednesday, it sold $67.5 million sold to 27 dealers, and purchased $2.5 million from one dealer, under bids ranging from N1,480/$1 to N1,500/$1. On Thursday, a further sale of $55.17 million was made to 19 dealers at N1,540.0/$1.
Although this looks like a small increase in customs rates, it has a lot of far-reaching consequences. Importers, who are currently rattling under a plethora of adversities, would now face this further increase in cost. There is concern about how this may actually contribute to inflation, another of those troubling phenomena in the Nigerian economy.
As the final decision-makers in Nigeria’s finances prepare for the fourth Monetary Policy Committee meeting of the year, all wait to see the policy annunciations of the quartet committee members. In the first half of 2024, the CBN raised the Monetary Policy Rate by a cumulative 750 basis points to address inflation and attract foreign investors.
The business community reacted with mixed reactions, some expressing the need for the rate adjustment, while others expressed concerns about how it may impact business operations and define the business environment in general.
As events unveil in this regard, stakeholders across the economic landscape of Nigeria will be looking forward in anticipation as there could be further changes in the country’s quite complex and dynamic financial ecosystem.