• Tuesday, March 05, 2024
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BusinessDay

Naira falls to record low of N465.13 on rising dollar demand

Explainer: How to prepare for naira devaluation and what it means for Nigerians

Naira on Wednesday fell to N465.13 per dollar, the lowest ever at the Investors and Exporters (I&E) forex window, Nigeria’s official foreign exchange (FX) market.

This represents a 0.11 percent lower than N464.58 per dollar quoted on Tuesday at the I&E window, data from the FMDQ indicated.

The naira’,s weakness followed increased demand for the dollar by the end users for importation and travel allowances, traders said on Wednesday.

“There has not been so much money coming into the country,” a Lagos based analyst said, adding that what is happening in the United States could make some other countries panic.

Data from the banking sector regulator showed that net total foreign exchange inflow stood at $72.4 billion in 2022, representing a 23.3 per cent decline compared to the $94.3 billion recorded in 2021 and also a 37.4 per cent decline from $115.6 billion received in 2020..

Dollar closed at the rate of N747.50 at the parallel market on Wednesday, following increased demand for the greenback by importers.

This showed a 0.20 percent drop in the value of the naira against the dollar, when compared to N746 traded in the morning of the same day.

Following the outcome of the deliberations at the just concluded third edition of the RT200 non-oil export bi-annual summit, the Central Bank of Nigeria (CBN) said export of products in their raw form shall be eligible for rebate.

The CBN said this in a circular dated May 10, 2023 and signed by Ozoemena Nnaji, director, trade and exchange department, CBN.

The circular stated that a rebate of N25 for every dollar repatriated and sold on the investors and exporters window for third party use shall apply, while N15 for every USD$1 repatriated and sold on the I&E window for own use shall apply, adding that the effective date for implementation is April 01, 2023.

The payment of the graduated rebate amounts is expected to encourage exporters of primary products to enhance their capacity and eventually engage in value added exports. All authorised dealers are to ensure strict compliance, the Nnaji said in the circular.

Last year, Nigerian banks commenced a review of dollar request processing time for school fees, upkeep and rent payment, following dollar shortages. This according to the banks was due to limited foreign exchange availability provided by the CBN.