Expert Projects New Exchange Rates For Naira as CBN Slashes Customs Duty
- Renowned economist Bismarck Rewane has predicted that the naira will recover against the US dollar in January 2025
- Rewane disclosed that there is no economic basis for the naira to trade at less than 30% of its fair value in less than one year
- The Nigerian currency has experienced mixed performance across all foreign exchange market segments in the past week
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Bismarck Rewane, an economist and the managing director of the financial derivatives company (FDC), predicted that the naira would strengthen further in January 2025 relative to its current rate.
Rewane disclosed this during his monthly Lagos Business Executive Breakfast Session presentation.
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Mixed fortunes for naira as reserves rise
The Nigerian currency has experienced mixed performance across all foreign exchange market segments in the past week.
The Central Bank of Nigeria (CBN) said the FX reserves hit record levels in 33 months, advancing 68 points weekly to settle at $40 billion.
Data from the FMDQ Exchange shows that the naira depreciated by 70 basis points against the dollar to settle at N1,678.87 per dollar.
However, the naira strengthened at the parallel market by 30 basis points against the dollar to close at N1,720 per dollar.
Rewane asks CBN to auction more dollars
Rewane disclosed that there is no economic basis for the naira to trade at less than 30% of its fair value in less than one year.
He expressed strong optimism that the naira would recover some of its losses in January.
According to him, the difference between the black market and the official window has disappeared.
He said the development was responsible for the 30% value depreciation due to speculative round-tripping.
The FDC boss said the CBN should announce a dollar sales programme similar to the T-Bill auction to help reduce market uncertainty.
Naira to stabilise at N2,000 per dollar
He asked the apex bank to structure the FX market more transparently.
Punch reports that Rewane added that the forex rate is the leading cause of inflation in Nigeria, saying that a partial recovery of the naira will not help to reduce inflation but will curtail money supply saturation in the market.
The economist said the local currency will trade below N2,000 per dollar.
CBN slashes Customs rate to clear goods at ports
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) slashed customs exchange rates for importers clearing goods at the ports.
According to data from Nigeria's trade portal, importers looking to clear goods would pay N1,655.38 per dollar from Monday, November 11, 2024.
The latest rate represented a 1.51% increase compared to the N1,680.90/$ exchange rate quoted on Tuesday, August 20, 2024.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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