Naira Holds Position after Banks Tax Clearance Update
Nigerian naira holds a position against the United States (U.S.) dollar dominance across the market following a recent update issued by deposit money banks.
Amidst foreign exchange scarcity that nudged the Central Bank of Nigeria (CBN) to continue micromanaging its limited external reserves, local banks told customers about the need to submit tax certificate clearance for every foreign currency transaction and other documents to process form A.
Explaining the effects, analysts told MarketForces Africa that to whom much is given, much is expected. For end users whom the CBN wants to sell forex, they have to show they are fiscally responsible with tax payments.
The CBN will continue to respond to loopholes in an effort to keep the naira stable, analysts said. To some currency analysts, the major thing is the need to adopt a market clearing rate.
MarketForces Africa gathered from economic and financial experts that a unified rate would remove currency speculation. The International Monetary Fund has also said a single exchange rate will drive foreign portfolio investors into Africa’s largest economy.
The naira remained unchanged on Thursday at the Investors and Exporters FX window, exchanging at N464.67 to the dollar at the Investors and Exporters window. The local currency did not change from its value on Wednesday, while the open indicative rate closed at N464.64 to the dollar on Thursday.
Market data from FMDQ Exchange indicated that an exchange rate of N467 to the dollar was the highest rate recorded within the day’s trading before it settled at N464.67.>>Naira Steadies as Banks Issue Update on FX Purchase
The naira sold for as low as 460 to the dollar within the day’s trading. A total of $250.98 million dollars was traded at the official Investors and Exporters window on Thursday.
The parallel market experienced an appreciation, with a rise of 0.85% to N760 from N766. One-month, three-month, and one-year Dollar/Naira forward rates settled at N482.26, N510.45, and 562.08, respectively, indicating losses of N2.39, N4.45, and N4.34.
