The exchange rate for import duties collected by the Nigeria Customs Service (NCS) has surged to N1601.84/$ due to the recent depreciation of the naira.
On July 26, 2024, the naira hit a four-month low of N1,609 to the USD, according to FMDQ exchange data. This depreciation challenges the Central Bank of Nigeria’s (CBN) ongoing monetary policy tightening efforts aimed at stabilizing and strengthening the naira through MPR hikes.
The naira’s decline to this lowest level since March 14, 2024, when it was N1,608.98/$1, follows just three days after its best performance against the dollar since March, highlighting renewed volatility in the foreign exchange market.
In an effort to stabilize the market and increase dollar supply, the CBN has been selling foreign exchange to authorized Bureau De Change (BDC) operators. Over the past two weeks, the Nigerian Central Bank allocated $148 million to 29 authorized dealers at exchange rates between N1,470.00/$1 and N1,510.00/$1. This followed a previous allocation of $122.67 million to 46 authorized parties, aiming to reduce volatility and boost market liquidity.
Additionally, the CBN has expanded its “asymmetric corridor,” increasing lenders’ borrowing costs and reducing their deposit returns to tighten naira liquidity.
The Ministry of Finance has also announced plans to issue $500 million in USD-denominated bonds, targeting diaspora funds and foreign currency savings within Nigeria.
