FG to clear $6.7bn demand by December, crack down on illegal currency traders

FG to clear $6.7bn demand by December, crack down on illegal currency traders

 

The Federal Government is targeting end of this year to clear the backlog of dollar demand estimated at $6.7bn and bolster the naira forward market.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed this in an interview on Monday.

He said the government planned to introduce new foreign exchange rules, including a crackdown on illicit currency trading.

He spoke with Bloomberg on Monday. According to him, the government hopes the reform will result in the naira closing its gap with the unofficial rate and reaching a “fair price” before the end of 2023.

Oyedele said FG also aims to expand the official market to include all legitimate transactions while stifling the illicit “black market” for foreign currency.

“We think all of that will happen before December, and maybe in a matter of a couple of weeks we will begin to see the results, such that before the end of the calender year, naira should find its true value, not the one that is being done currently in the parallel market,” Oyedele said.

He added that the government sees a “fair price” for the dollar at “N650 to N750”.

Oyedele said the divergence between the official and parallel market rates “means you are sucking liquidity and supply from the official market to the parallel market, because everyone wants the premium”.

On October 23, 2023, Minister of Finance and coordinating Minister of the Economy, Wale Edun, said Nigeria expects $10 billion in foreign currency inflows in the next few weeks to ease liquidity in the foreign exchange market.

On Monday, the naira appreciated further at the parallel section of the market to N1,150 a dollar.

The local currency appreciated by 5.68 per cent at the official market to close at N789.94 to the dollar on Friday — from N837.49/$ on Thursday