Nigerian govt to introduce new FX rules, clamp down illegal trading

The Federal Government is set to introduce new rules for the foreign exchange market and also crackdown of illegal trading of currency by the end of 2023.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele disclosed this in an interview with Bloomberg, adding that it is hoped that the move would result in the naira closing its more-than-45% gap with the unofficial rate and reaching a “fair price” by year-end.

According to Oyedele, the government also plans to clear a backlog of dollar demand estimated at about $6.7 billion, bolster the naira forward market, and set transparent rules for the operations of the official market.

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Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), said: “We think all of that will happen by December, and may be in a matter of a couple of weeks we will begin to see the results, such that before the end of the calendar year, naira should find its true value, not the one that is being done currently in the parallel market.”

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

Speaking further, 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”.

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