CBN hikes exchange rate for cargo clearance to N1,605/$1

By Sodiq Adelakun

In a recent development that has significant implications for importers and the business community, the Central Bank of Nigeria (CBN) has once again increased the exchange rate for cargo clearance, this time to N1,605 per US dollar.

This adjustment follows a series of fluctuations where the rate initially rose to N1,515/$, dropped to N1,472/$, and has now reached a new high. The pattern of escalating rates has been consistent since the end of last year, with the rate climbing from N952/$ in December to subsequent levels of N1,356/$, N1,413/$, and N1,444/$.

After a brief period at N1,515/$, the rate has settled at the current N1,605/$, as confirmed by the Nigeria Customs Service (NCS) portal on Wednesday.

This hike was preceded by a significant review on February 15, when the CBN increased the exchange rate for clearing goods from N1,444.56/$ to N1,515.09/$.

The NCS, which levies duties on imported cargoes based on the harmonised commodity and coding system (HS code), has varying charges that range from 5 percent to 35 percent.

During a recent Senate hearing, the CBN Governor, Yemi Cardoso, highlighted the burgeoning volume of transactions in the FX market, which has surpassed the $1 billion mark for the first time in years. This surge in the exchange rate for cargo clearance is poised to impact the cost of imports and could potentially lead to price adjustments in the local markets.

Importers and businesses engaged in international trade are advised to take note of these changes and plan accordingly.

He opined that the increase in the volume of transactions is due to the series of reforms embarked on by the apex bank. Some of these reforms include the discontinuance of the CBN development finance program, removing the cap on the spread of interbank transactions and many others. He noted that the bank’s policies are geared to discourage arbitrage, and increase inflow, especially from the diaspora.