In a notable development for importers and traders, the exchange rate for cargo clearance has witnessed a decline, dropping to N1593.41 per US dollar from the previous N1612.28/$, marking a decrease of approximately N18.87.
This adjustment follows last week’s decision by the Central Bank of Nigeria (CBN), in collaboration with the customs service, to raise the exchange rate for cargo clearance by N18.44. The recent reversal in the exchange rate for cargo clearance reflects the recent resilience and strengthening observed in the value of the naira on the forex market.
According to data from FMDQ, the naira closed at N1602.75 on the last trading day of the previous week, March 15, 2024, further underscoring the positive trajectory of the local currency.
Convergence of Official and Parallel Market Rates
The past few weeks have witnessed a notable reduction in the volatility that characterized the second devaluation of the naira earlier in the year. This period has seen a significant narrowing of the gap between the official and parallel market rates, with rates in both segments nearly equal.
Reports from Nairametrics indicate that exchange rates in both the official and parallel markets have averaged around N1600/$1, with fluctuations ranging between N1590 and N1630, resulting in a disparity of less than 2%. This contrasts sharply with the previously accepted 5% premium between official and parallel market rates.
The Central Bank’s Decision on FX Gains Utilization
In a recent directive reiterated last week, the Central Bank of Nigeria (CBN) cautioned banks against utilizing FX revaluation gains for dividend payments and operational expenses. Instead, the CBN emphasized the need for financial institutions to set aside gains from FX revaluation as a buffer against potential liquidity shortages in the market.
The significance of this directive is underscored by the experiences of various sectors in 2023, where companies in manufacturing, consumer goods, and telecommunications faced considerable FX losses. This directive aims to ensure greater stability and prudence in the management of foreign exchange gains and losses, thereby safeguarding the overall health of the financial system.
