Naira Falls as Banks Issue Update on Tax Clearance for FX Demand

Naira Falls as Banks Issue Update on Tax Clearance for FX Demand

Naira: exchange rates across the foreign exchange (FX) markets weakened slightly as Nigeria’s deposit money banks (DMBs) update their customers about regulatory demand for tax clearance certificates for foreign currency transactions.

Amidst the new government plan to unify the exchange rate, the naira closed declined marginally to N464.67 per United States (US) dollar from N464.50 at the Investors’ and Exporters’ foreign exchange window.

On a positive side, the parallel market experienced an appreciation, with a rise of 0.85% to N760 from N766 per greenback.  One-month, three-month, and one-year forward rates settled at N479.87, N506.00, and 557.74, respectively.

The exchange rate movements at the forward market indicate gains of N1.93, N10.22, and N13.00, according to Cowry Asset Management Limited.

Data from forex market showed that the open indicative rate closed at N464.10 to the dollar on Wednesday. An exchange rate of N467 to the dollar was the highest rate recorded within Wednesday’s trading before it settled at N464.67.

The Naira sold for as low as 460 to the dollar within the days of trading. A total of 163.74 million dollars was traded at the official Investors and Exporters window on Wednesday.

In line with regulator directive, Nigerian deposit money banks said customers seeking to purchase personal or business traveling allowance will be required to submit current tax clearance certificate.

The requirement is extended to all foreign exchange transactions as the Central Bank of Nigeria (CBN) continues to struggle to stabilise the exchange rate.  Banks stated that a tax clearance certificate will be required to process, maintenance and upkeeps and medical allowance.

As a result of the new development, banks told customers that they would be required to upload current tax certificate clearance in addition to other documents on the CBN trade monitoring system (TRMS) for form ‘A’ request. # Naira Falls as Banks Demand Tax Clearance for FX Request #Naira Steadies as Banks Issue Update on FX Purchase