The struggling naira weakened by N67 per the US dollar week on week amidst a new measure to drag out foreign currency hoarded by some locals into the market.
The spot rate at the official window depreciated to ₦1,666.72 per US dollar from N1600 at the beginning of the week even as the Central Bank sold $77 million to banks to boost liquidity.
The naira however recorded N5 gain week on week to close at ₦1,730.00 in the parallel market amidst slowdown in seasonal demand for FX for year-end imports.
The naira exchange rate failed to bulge despite FX auction sales to banks, and latest move to bring forth foreign currencies outside banks into the economy.
Last week, the Nigerian government unveiled an amnesty program to draw out foreign exchange hoarded by individuals outside banks. Individuals won’t be subjected to tax audits, and the government won’t expropriate the assets, Nigeria’s finance ministry said in a statement.
“The scheme offers a secure, confidential channel for people to reintegrate their legitimate foreign-currency funds, promoting stability and growth for our nation,” Finance Minister Wale Edun said in the statement.
He said by facilitating the voluntary disclosure, depositing, repatriation, and investment of internationally tradable foreign currency held by Nigerians, both within and outside the country, “the scheme aims to integrate these legitimate foreign currency assets into the formal economy”.
“The federal government of Nigeria is pleased to announce the commencement of the foreign currency voluntary disclosure, depositing, repatriation, and investment scheme, known as the disclosure scheme,
“…in pursuance of Executive Order No. 15 of 2023 titled ‘Disclosure, Depositing, Repatriation, and Investment of Eligible Foreign Exchange Assets and Related Matters Order, 2023 and
“…the ‘Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme Guidelines, 2024’, issued by the Honourable Minister of Finance and Coordinating Minister of the Economy, on October 25th, 2024,” the statement reads.
Speaking on the scheme, Edun said the initiative would enhance financial security and contribute positively to the economy by increasing reserves and stabilising exchange rates.
He said: “The disclosure scheme is a bold initiative aimed at integrating foreign currency outside the formal financial system into the formal economy.
“It strengthens transparency and economic resilience, setting us on a path to rapid economic growth. The disclose scheme seeks to promote transparency in the financial sector by formalising legitimate foreign currency assets held outside the Nigerian banking system by Nigerians within or outside of Nigeria.
“It is designed to eliminate weaknesses in the existing framework by promoting cashless and legitimate transactions within the formal financial system. This strengthens regulatory enforcement while also encouraging financial practices that reduce the likelihood of illicit cash transactions.
“The scheme offers a secure, confidential channel for people to reintegrate their legitimate foreign currency funds, promoting stability and growth for our nation. #Naira Drops N67 as Nigeria Launches FX Disclosure Scheme FX Stability: CBN Sells 122.671m Dollars to 46 Authorised Dealers
Credit/ Marketforces Africa
