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Naira To Exchange For N650/$ Before December 2023 – FG

Federal government is set to introduce new foreign exchange rules aimed at reducing the gap between the official naira rate and the unofficial market rate.

Gatekeepers News reports that the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed this during an interview with Bloomberg on Monday.

Oyedele said 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.

These reforms will involve tackling illicit currency trading, clearing a backlog of dollar demand estimated at $6.7 billion, strengthening the naira forward market, and establishing transparent guidelines for the official market’s operations.

In addition to these changes, the government seeks to expand the official market to encompass all legitimate transactions while curbing 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, Wale Edun, Minister of finance and coordinating minister of the economy, 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.

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

With these reforms, the Nigerian government aims to foster a more stable and equitable foreign exchange environment, providing benefits to both consumers and businesses.

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