The foreign exchange rate for the Nigeria Customs Services’ (NCS) cargo clearance in ports and other goods entry points has dropped to N1260.49/$ from N1330/$ in the past few days.
This represents a decline of around N70 for cargo clearance.
The new rate reflects the closing rate on the official NAFEM window yesterday where the naira closed at N1255/$.
- The exchange rate used for import duty payments on the customs portal has been decreasing over the last two weeks, reflecting the naira’s fortification in the foreign exchange (FX) market. This rate had reached its zenith at N1,624.7/$1 and has been on a downward trajectory to its present level.
- The Customs Service has confirmed in the past that the Central Bank of Nigeria (CBN) frequently adjusts the exchange rate to reflect the prevailing official market rate.
- Regarding the customs exchange rate and its fluctuations, the CBN clarified that the exchange rate applicable on the date when the ‘Form M’ is initiated would be the benchmark for assessing import duties.
- The Nigerian Customs boss had earlier complained over the week that the frequent changes in the exchange rate for duty collection and cargo clearance is inhibiting trade in the country noting that in the first quarter alone, there were about 28 different exchange rates for cargo clearance.
The CBN has recently implemented various reforms with the objective of stabilizing the forex market, curbing speculative activities, eliminating pricing irregularities, and enhancing the naira’s strength.
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CBN’s reforms
The alignment of the official and parallel market exchange rates is an indication of the effective application of the CBN’s foreign exchange market reforms.
- Some of these reforms enforced limitations on International Oil Companies (IOCs), permitting them to repatriate only half of their foreign exchange earnings instantly, with the stipulation that they must wait 90 days to remit the rest.
- Additionally, commercial banks are now prohibited by the central bank from using profits from foreign exchange sales for operational expenses and dividend disbursements. In a recent move, the central bank started offering dollars to Bureau de Change operators at a fixed price of N1,251 per dollar.
