The Nigerian currency, the naira, experienced a 0.68 percent appreciation against the United States dollar on the Investor & Exporter forex window. On Tuesday, it closed at N763/$, compared to N768.17/$ at the end of trading on Monday. There was no trading on Wednesday due to a two-day public holiday for the Sallah celebration.
According to data from the FMDQ, trading began on Tuesday at N760.5/$ and reached a high of N841/$ and a low of N467/$ before closing at N763/$.
The trading activity also saw an increased turnover of $245.65 million on Tuesday, up from $198.13 million at the end of trading on Monday.
Previously, the Central Bank of Nigeria had instructed Deposit Money Banks to remove the rate cap on the naira at the I&E window, allowing the national currency to float freely against the dollar and other global currencies.
Before this announcement, the naira had closed at 471.67/$ on the I&E window, while the parallel market recorded a rate of 740/$.
Professor Segun Ajibola, an Economics professor at Babcock University and former President of the Chartered Institute of Bankers of Nigeria, described the previous multiple exchange rate regime as a breeding ground for corruption. He emphasized the need to expand foreign exchange sources such as non-oil exports, remittances, and foreign direct investments, as well as maximize the OPEC quota on crude oil exports. This expansion and increased supply of foreign exchange could help alleviate pressure on both the official and unofficial markets, leading to a convergence of exchange rates.
The ongoing foreign exchange reforms have also impacted the maritime sector, as reported by The Eyewitness9ja News. The Central Bank of Nigeria and the Nigeria Customs Service have increased the exchange rate used for calculating import duty by 40 percent, raising it from N422.30/$ to N589/$.