The exchange rate for cargo clearance witnessed a dramatic increase to N1413.6/$ barely 24 hours after the Central Bank of Nigeria, CBN, raised the rate N1, 356.8/$.
The new rate as reflected on the Customs trade portal showed a 4.4% increase in import duties on Saturday.
An earlier review of the federal government’s single-window trade portal of the customs service reveals that the previous exchange rate of N951.94 to the USD at the beginning of the year has been revised upwards to N1356.88 yesterday, a staggering 43% increase on Friday.
The Nigeria Customs had earlier indicated that the exchange rates for cargo clearance, also known as import duties, will be determined by the official foreign exchange rate set by the apex bank.
Meanwhile, since the Central Bank implemented the exchange rate market unification in June, Nigeria has faced a currency crisis, with market forces determining the naira’s value.
This has led to a significant depreciation, surpassing 100%, compared to its average of N460/$ before the policy change.
Accordingly, the naira hit a fresh low this week at N1,461.90 against the USD and, on Tuesday, dipped below the parallel market rate.
Earlier, the Customs boss clarified that the service doesn’t determine exchange rates; rather, it adheres to the official market (NAFEM) as directed by the CBN.
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The exchange rate on the NAFEM window closed at N1,435.53/$1 for the week tumbling by about 34% after CBN adjusted the method for setting its rate in the official foreign exchange market.
Meanwhile, the Central Bank continues to make moves to stabilize the foreign exchange market.
For instance, a new circular introduced guidelines aimed at reducing the risks associated with speculations, noting that some commercial banks hold long-term positions in forex with the hope of profiting from currency depreciation.
The Governor of the Central Bank, Mr Yemi Cardoso, also recently stated that the naira is undervalued and promised to work towards real price discovery in the foreign exchange market in 2024.
In addition, the CBN plans to implement inflation-taming policies and collaborate with the Ministry of Finance to stabilize the exchange rate and curb inflation.
These developments reflect the complexities and challenges in Nigeria’s foreign exchange market, with implications for businesses, individuals, and the broader economy.