Sure! Let’s make this blog post easy to understand, and I’ll keep the HTML tags as requested.
The exchange rate for import duties collection by the Nigeria Customs Service (NCS) has gone down from N1,584/$ on July 22 to N1,541/$ today. That’s a drop of N43.
Why is this happening? It’s because the naira, Nigeria’s currency, has become stronger in the official market.
Data from FMDQ shows that yesterday, one dollar was worth N1,548. The day before, one dollar was worth N1,564. That means the naira got stronger by N16 in just one day.
CBN Steps In To Help
On Monday, the naira got much stronger, gaining N100 to the dollar. The Central Bank of Nigeria (CBN) helped by selling dollars to Bureau De Change (BDC) operators. They sold $106 million last week. This helped the naira improve from N1,596 to N1,500 on Monday.
Why did the CBN do this? They said more businesses needed dollars, and it’s summer, so more people are buying things.
Earlier, the CBN said it would sell $20,000 to each eligible BDC at N1,450, which was below the market rate at that time. A similar help was given in March, making the naira one of the best-performing currencies then. Some people accused the CBN of using too much of Nigeria’s money reserves to keep the naira strong, but the bank’s Governor said this wasn’t true.
Good news! Nigeria’s money reserves from outside the country went up a lot. By July 18, 2024, it was $37.05 billion. The CBN Governor said this is enough to pay for 11 months of imports. This is up from $34.70 billion at the end of June 2024.
Decisions Made by the Central Bank
Yesterday, the Central Bank’s Monetary Policy Committee (MPC) raised interest rates by 50 basis points, making it an 800 basis points increase this year. Mr. Yemi Cardoso, who is the Chairman of the committee, said that the gap between the official exchange rate and the street rate is getting smaller. This means the bank’s policies are working.
He said, “The MPC noticed the smaller gap between different exchange rates in the market. This shows the market is getting better and there’s less chance for people to cheat the system.”
“The committee also noticed that more foreign reserves make people more confident about a stable exchange rate. They told the bank to find ways to get more money from Nigerians living abroad.”