The official market rate of the NAFEM window, which was N1,482.81 to the USD, was slightly less than the exchange rate used for customs duty collection, which increased from N1467/$ to N1,480.
Despite the recent depreciation of the naira, the exchange rate used for the customs duty collection is currently the same as the rate displayed on the official window. About two weeks ago, the naira passed the N1500/$ threshold before progressively falling to its current value.
The Naira made a noteworthy comeback last week, picking up a little value in relation to the US dollar. The Naira fell to a weekly low of N1,485/$ on Thursday before closing the week at N1,481/$. The Naira began the week at 1468.99/$1.
On the other hand, average daily forex turnover ranged from $123 million and $261 million in the week.
Read also: Exchange Rate Drops By N19, Exceeding Official Market Rate for Customs Duty Collections
Additionally, during the week, the CBN offered a total of N508.98 billion during the Nigerian treasury bill (NTB) auction held on May 22, 2024. The subscription levels significantly surpassed the initial offer, highlighting the continued appetite for fixed-income securities amidst a volatile economic landscape.
Despite the oversubscription reaching N1.5 trillion, only about N638.98 billion was allotted to treasury bill investors. The heightened interest in treasury bills can be attributed to the recent increase in the MPR, making government securities more attractive to yield-seeking investors.
The increase in forex turnover on Thursday suggests heightened trading activity, possibly driven by speculative actions and adjustments to market positions.
Furthermore, during the week also, the CBN continued its MPR hike increasing interest rates by 150 basis points from 24.75% to 26.25%- the third consistent increase since February.
Read also: In Two Months, FX Rate For Customs Duty Collections Crosses N1500/$ Record High About
Stakeholders in the business community have criticized the apex bank for its policy initiatives aimed at combating inflation and stabilizing the exchange rate.
Both the Centre for the Promotion of Public Enterprise (CPPE) and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) have expressed discontent with the CBN’s interest rate hikes and frequent adjustments to the customs exchange rate.
The CPPE stated that the increase in interest rates, coupled with fluctuations in customs duties rates, could exacerbate inflation across the country. The Center had previously advised the CBN to adopt a quarterly exchange rate for import duties calculations instead of making regular changes.
Dele Oye, President of NACCIMA, argued that the Nigerian Customs Service (NCS) should collect duties in naira rather than foreign currencies. He emphasized that the government must uphold its commitment to conducting business in Naira instead of indirectly supporting the dollarization of the economy through its policies
