The Nigerian naira has demonstrated notable strength against the U.S. dollar on November 1, 2023, by closing at N786.02 per US dollar at the official market. This marks a significant 3.73% increase from the previous day’s rate of N815.32/$1.
During the trading day, the naira recorded an intraday high of N1,101.00/$1 and an intraday low of N701.00/$1, showcasing a considerable spread of N400/$1.
Data sourced from the official Nigerian Autonomous Foreign Exchange Market (NAFEM) window indicates that the forex turnover at the close of the trading session amounted to $105.98 million, reflecting a 41.82% decrease compared to the previous day’s turnover.
In the unofficial black market, where forex transactions occur unofficially, the naira also showed strength. It appreciated by 0.85% and was quoted at N1,170/$1, with peer-to-peer traders quoting around N1,180/$1.
In addition to these currency market dynamics, the federal government is considering the imposition of excise tax penalties on foreign exchange transactions conducted outside the official market window. This move is part of an effort to discourage the existence of multiple exchange rates in the country.
This proposal is one of twenty recommendations put forward by the Presidential Fiscal Policy and Tax Reform Committee, established by President Bola Tinubu in July. The committee’s mandate is to assess and provide guidance on reforms aimed at shaping Nigeria’s fiscal policy and tax system.
The Tax Committee, led by Taiwo Oyedele, has proposed a set of “quick win” recommendations designed to address pressing economic concerns, including exchange rate management, the consequences of removing fuel subsidies, inflation control, and the promotion of economic growth.
One of these recommendations involves the introduction of an excise tax on foreign exchange transactions that occur outside the official market. This measure aims to streamline and consolidate the foreign exchange market, reducing the existence of multiple rates and promoting financial stability.
The naira’s recent strength against the dollar is an encouraging development, and the government’s efforts to create a more unified and efficient foreign exchange system are essential for the country’s economic stability and growth.
For further insights and updates on the naira’s performance and related policy developments, please stay informed through reliable news sources.
