Price hike looms in Nigeria as CBN increases customs exchange rate

Price increments are imminent as the Central Bank of Nigeria, CBN, raised the Nigeria Customs Service exchange rate for importation at N1,356.883 per US dollar from N951.842.

The CBN usually determines the exchange rate for Duty collection.

Newsmen gathered on Friday morning that maritime stakeholders woke up to the rude shock of the increase in the exchange rate, which hitherto was set at N951.842 per dollar as of December 2023.

A frontline Customs Broker, Barr Michael Ovien, confirmed that the CBN has already effected the increased exchange rate on the Trader Portal for Single Window Trade as of Friday morning.

With the latest increment, importation costs are billed to increase, while the price of goods and services in the market would increase astronomically.

According to the National Bureau of Statistics, Nigeria’s total trade in the third quarter of 2023 stood at N18.80 trillion.

Exports were valued at N10.35 trillion, while total imports stood at N8.46 trillion. With the latest development, the implication is that the cost of imported goods will rise as the exchange rate hits N1,356.883 per US dollar.

Recall that the CBN has issued a new circular that removes the previous cap on exchange rates quoted by International Money Transfer Operators, IMTOs.

The circular signed by Hassan Mahmud, Director of Trade and Exchange Department, was titled ‘Removal of Allowable Limit of Exchange Rate Quoted by the International Money Transfer Operators’.

Amid the free fall of Naira in the past 48 hours, CBN issued sweeping policy interventions to curb the continued fluctuations in the country’s FX market.

CBN also issued a guideline to curb foreign currency hoarding and speculation on Wednesday.

The development had impacted the Naira positively as it rebounded against the US dollar on Wednesday.

Meanwhile, the forex has remained high, quoting at N1461.90 per dollar at Thursday’s close of the FMDQ market.

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