Importers to Pay More as CBN Hikes Customs Exchange Rates, Naira Falls to New Low
- The Central Bank of Nigeria (CBN) has increased the foreign exchange rates for Customs import duties at Nigeria’s ports
- The CBN raised the FX rates to N1,599.392 a few hours after it slashed it to N1,481 per dollar
- The increase in Customs rate comes amid the depreciation of the naira in the official market at N1,608.80 per dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
The Central Bank of Nigeria (CBN) has increased the exchange rates for Nigeria Customs Service import duty following the crash of the Nigerian currency, the naira, to a new low.
Data from the Customs trade portal obtained by Legit.ng shows that the apex bank increased the Customs rates from N1,541 to N1,599.392 48 hours after it slashed the rates.
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Naira crashes to a four-month low
The development comes as the naira crashed to a new low on Thursday, July 25, 2024.
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Data from the FMDQ Exchange shows that the naira depreciated to N1,603.80 per dollar on the NAFEM window on Thursday, July 25, 2024, as against the N1,586.71 it traded the day before.
Experts say the depreciation is the lowest the naira has fallen since March, when it traded at N1,608.98 per dollar, breaking through the N1,600 threshold.
Traders quoted the local currency at a high of N1,620 per dollar and a low of N1,519 on Thursday, July 25, 2024, as demands for the US greenback increased.
The depreciation comes after the naira gained almost N100 against the dollar at N1,500 per dollar, a few days after the CBN sold forex to Bureau de Change operators.
FX turnover declines as expert predicts new rates
FMDQ Exchange data shows that foreign exchange turnover declined by 23.35% from $171.03 million to $131.09 million on Thursday, July 24, 2024.
This development comes as Bismark Rewane, the managing director of Financial Derivatives Company Limited, predicted that the naira will rally from N1,700 to N1,500 per dollar as the interest rate hike by the Central Bank of Nigeria (CBN) is expected to boost foreign portfolio investment in August 2024.
CBN’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) to 26.75% from 26.25% in May 2024 to control surging inflation and promote a favourable environment for foreign investment.
Prices of commodities to moderate
The Financial Derivatives boss also predicted that commodity prices, such as rice, which are currently at N82,000, would drop to N70,000 by September.
He also forecasted that wheat flour could fall from N59,000 to N50,000 and beans from N150,000 to N110,000.
Last quarter's data from the National Bureau of Statistics (NBS) shows a mixed bag: rice prices slightly increased by 2.4% from N80,000 to N82,000, while beans prices soared by 36% from N95,000 to N150,000.
Palm oil prices increased by 9%, from N5,500 to N60,000, and eggs, depending on size, increased from N3,500 to N5,500.
Rewane said he expects these prices to drop with the influx of imported food following the 150-day duty-free import window provided by the Nigerian government.
Buyers quote new exchange rates for dollar
Legit.ng earlier reported that after trading for N1,500 per dollar on Monday, July 22, 2023, the naira reversed gains on Tuesday, July 23, 2024, to trade at N1,548.76.
Monday’s gain is the highest the naira has traded since March, when the Central Bank of Nigeria (CBN) intervened in the foreign exchange market by selling dollars to Bureau de Change (BDC) operators.
However, the naira’s crash on Tuesday comes amid Forex sales by the CBN to BDC operators who were sidelined in the first round of sales.
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Source: Legit.ng
