Customs Exchange Rate Drops As Naira Increases In Strength.

The Nigeria Customs Service (NCS) has experienced a decrease in the exchange rate for import duties collection. As of July 22, the rate stood at N1,584/$, but it has since dropped to N1,541/$, marking a decline of N43.

This decline is a result of the recent appreciation of the naira in the official market. On Tuesday, the naira closed at N1,548 to the USD, showing an appreciation of N16 compared to the previous day’s closing rate of N1,564/$.

Earlier this week, the naira gained significant ground against the dollar. The Central Bank of Nigeria (CBN) intervened by selling $106 million to licensed Bureau De Change (BDC) operators, causing the naira to appreciate by around N100. This is the most significant gain since March this year when the naira experienced a single-day appreciation from N1,596 to N1,500.

In explaining the CBN’s intervention, Governor Yemi Cardoso mentioned a rise in demand from businesses and the expected seasonal increase in demand during the summer. It is worth noting that the CBN had previously announced the sale of $20,000 each to eligible BDCs at the rate of N1,450, significantly below the prevailing official market rate. This move resembles a similar intervention by the apex bank in March, which led to the naira becoming the world’s best-performing currency.

However, accusations that the CBN is depleting the foreign reserves to defend the naira have been refuted by the bank’s Governor. Nigeria’s foreign reserves have actually experienced substantial growth, reaching $37.05 billion as of July 18, 2024, driven by an increase in diaspora remittances.