Emmanuel OchayiAccording to the current update available on the Nigeria Customs Service’s (NCS) exchange rate portal, the Foreign exchange (FX) rate for cargo clearance has dropped to N1,164.84/$, below both official and black market prices.
The current Customs exchange rate of N1,164.8/$ is less than what is being offered at the official and illegal markets. The naira closed the day at N1280 to the dollar, according to the unofficial window, up 8.7% from Friday’s rate of N1400 to the dollar.
Between March and April, the naira experienced significant gains, earning it the title of world’s best-performing currency. On the other hand, the currency has experienced a sharp decrease in the official and illicit markets during the past week. The naira is said to have lost around one-third of its value within the last week, thus the purple patch appears to have faded.
The Central Bank of Nigeria (CBN) sold $10,000 to Bureau de Change operators at a rate barely over N1,000 to the dollar, which is below the official market rate. The CBN set the sale margin at just 1.5% of the buy price. The currency rate has not stabilised as a result of either of these measures.
READ ALSO: FX Market: BDC Operators Unveils Plan For Unified Retail Market To Tackle Volatility
The CBN has prioritized exchange rate stability from the start of the year, and its policies have been developed with that objective in mind. Over the past four months, the central bank has taken strong action against speculators on the internet and off. In addition, it implemented cash pooling for international oil corporations (IOCs) and increased the monetary policy rate (MPR) by 600 basis points. and sold T-bills at a yield of more than 20%.
The regular variations in the Customs FX rate indicate that the Nigerian foreign currency market remains unstable, despite the CBN’s best efforts. The currency rate has been significantly impacted by the CBN’s measures, but more has to be done to stabilise the foreign exchange market.
It is anticipated that importers and exporters will be impacted by the decline in the Customs exchange rate, which is a noteworthy development in the foreign exchange market. The depreciation of the naira has increased the cost of imports, potentially resulting in higher consumer prices.
The CBN is now working to stabilise the currency rate, and more actions in this area are anticipated from the bank. The Customs exchange rate has decreased, which is depressing. it is not unexpected given the foreign exchange market’s volatility.
The CBN stated in a statement that “we are working to ensure that the market is stable and efficient.” Supply and demand influence the exchange rate. We’ll keep working towards this objective, and we do not doubt that the naira will soon stabilise.
The decline in the Customs Foreign exchange (FX) rate serves as a reminder of the difficulties the Nigerian economy faces and emphasizes the necessity for the CBN to keep up its efforts to maintain a stable exchange rate. The economy has suffered greatly as a result of the naira’s devaluation, so the CBN needs to act swiftly to resolve this problem.
On the other hand, importers and exporters are anticipated to be impacted by the decline in the Customs exchange rate—a notable development in the foreign exchange market.
The CBN is now working to stabilise the currency rate, and more actions in this area are anticipated from the bank. The weakening of the naira has had a big effect on the economy. and it is crucial that the CBN act to resolve this matter.
