Tinubu’s Government Targets N750/$ Exchange Rate by Year End

Nigeria is introducing a rash of policies, including a crackdown on illegal currency trading, as it seeks to close the more-than-45% gap with the unofficial exchange rate of the naira with the hope of a “fair price” of seven hundred and fifty Naira to the dollar by year-end, a top official told Bloomberg.

The Naira closed higher at N1,165 to the dollar Monday, gaining 2.5%.

The government plans to clear a backlog of dollar demand estimated at $6.7 billion, bolster the naira forward market, and set transparent rules for the operations of the official market, Taiwo Oyedele, chair of the presidential committee on fiscal policy and tax reforms, said in an interview with Bloomberg.

The plan also includes the expansion to the official market to include all legitimate transactions while snuffing out the illicit “black market” for foreign currency.

West Africa’s biggest economy allowed its currency to trade more more freely against the dollar in mid-June, resulting in a devaluation of about 40%. It was hoping to attract more dollar inflows and improve liquidity that had dried after years of pegging the naira against the dollar. Meanwhile, the parallel market thrived on the back of an inflexible official exchange.

Wale Edun the Minister Of finance disclosed that Nigeria also  expects to receive $10 billion of inflows in the coming weeks to help ease liquidity and clear the backlog of overdue forward contracts weighing on the naira.