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Wednesday, November 30, 2022

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CBN Targets N500-to-Dollar Exchange Rate

The Central Bank of Nigeria [CBN] is subtly pushing for exchange rate of N500 to a dollar at the parallel market to discourage importation of frivolous items into the country and in the process, conserve the nation’s dwindling foreign currency revenue.
As at yesterday, the Naira exchanged for N345 to a dollar at the parallel market.

A senior official of the CBN told Business Journal in Abuja: “Officially, we are alarmed at the rising exchange rate between the Naira and major international currencies. But unofficially, we are really optimistic that the expensive cost of major foreign currencies will discourage our people from travelling abroad to bring in all manner of goods the country could either produce domestically or do without entirely. For us at the CBN, the development is a double-edged sword.”

In the same vein, a market analyst in Lagos said the CBN could be the biggest beneficiary of the rising dollar value against the Naira.

“Who wants to import at a loss? What the CBN failed to achieve by banning 18 items, could now be achieved through the back door because many importers will simply think twice before travelling to Dubai or China to bring in second-hand clothing that could become very expensive for people to buy. The end result would be less importation. The only challenge would be for genuine operators in the real sector who need foreign exchange to import raw materials and machinery for industrial production.”

Affirming the situation, an importer, Mrs. K. Obioma said: “Normally, l travel to Dubai or London once a month to bring in mostly used consumer goods but the current high cost of dollar has become a real headache for my business. And that explains why l have not made any trip since this year. The issue is: how many people can afford such goods at the new price and how will l recoup the investment and make profit? Of course, l’m now looking inward for a business l can easily transact locally without the problem of dollars.”

Business Journal
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