The exchange rate for paying duties with the Nigeria Customs Service (NCS) has gone up by N3 more than the official closing rate of the Naira on the NAFEM window.
According to the customs exchange rate website, the rate for collecting duties is now N1584 per $1. The Naira closed at
N1581 per $1
on July 17, 2023, according to FMDQ data.
The current customs duty rate of N1584 per $1 is one of the highest since March 2024, when the Naira almost hit N1600 per $1.
Lately, the Naira has become weaker against the US Dollar, even though the Central Bank of Nigeria (CBN) is trying hard to increase the supply of foreign exchange.
Increase in FX turnover
Last week, trading in the Nigerian foreign exchange (FX) market went up by 40%. Info from Nairalytics, the research part of Newslodge, shows that the amount traded rose from $740.92 million to $1.03 billion from July 1 to 12, 2024.
The last time weekly FX trading went above $1 billion was in the first week of June, with $1.05 billion traded. This increase is partly because the CBN sold FX to authorized dealers.
CBN selling FX to dealers
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This week’s increased FX turnover was due to CBN selling $122.67 million to 46 authorized dealers over two days.
- Dr. Omolara Duke, Director of Financial Markets at CBN, said they sold $67.5 million to 27 authorized dealers and bought $2.5 million from one dealer on Wednesday.
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The bid range for these deals was between N1,480 and N1,500 per $1. Payments are due by July 12, 2024.
- Last Thursday, CBN sold $55.17 million to 19 dealers at a rate of N1,540 per $1. No FX was bought that day, and payments were due on July 15, 2024.
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CBN told all authorized dealers to use FX purchases only for trade-backed transactions and report them within 72 hours.
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The naira’s continued weakening happens as CBN gets ready for its fourth Monetary Policy Committee (MPC) meeting next week, where they will decide on interest rates.