CBN Exchange Rate Intervention Spurs Importers’ Relief Amid Customs FX Rate Decline T0 N1,238/$1

Importers in Nigeria have found a silver lining in the dip in the FX rate used by the Nigeria Customs Service (NCS) for clearance of goods.

The rate, which dropped from N1,246.66/$ to N1,238.17 to the USD, has brought a sigh of relief to importers, easing the financial strain they face. This marks a decline of N6.14 in just two days.

“This drop in the customs exchange rate is a welcome development for us,” remarked a Lagos-based importer who preferred to remain anonymous. “It means reduced costs for us, which is a big relief considering the challenging economic environment.”

The decrease in the customs exchange rate comes at a time when the Nigerian naira has been showing signs of strength against the dollar, reflecting the impact of the Central Bank of Nigeria’s (CBN) recent reforms in the foreign exchange (FX) market.

“The CBN’s efforts seem to be bearing fruit,” stated an economist familiar with the situation. “The measures taken by the central bank to stabilize the FX market are starting to show positive outcomes.”

Indeed, the CBN’s recent actions, including selling forex to Bureau De Change (BDC) operators at a discounted rate of N1,101/$ and restricting the use of foreign currency as loan collateral by banks, have contributed to the strengthening of the naira.

However, not everyone is entirely satisfied. Some stakeholders in the trade sector have raised concerns about the NCS charging import duties in foreign currencies rather than the naira.

“The customs rate for import duties should be in naira, not dollars,” argued Mr. Dele Oye, President of the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA). “The government should promote the use of our local currency to foster economic stability.”

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While importers may find temporary relief in the lower customs exchange rate, the debate over currency usage in trade transactions is likely to continue.

As Nigeria navigates its economic challenges, finding the right balance between foreign exchange management and supporting local currency usage remains a pressing issue for policymakers and stakeholders alike.