How high foreign currency exchange rates dollars, Pounds and Euro affect Nigerian economy and imported goods
Foreign currency exchange rate is one of the basic economic metrics used to determine the purchase power of the any currency. It tells the kind of international business deals that can be executed in each country. People purchasing power increase when their countries’ currencies rate is at par with major currencies like US dollar, Pounds Sterling and Euro.
Effect of US dollar exchange rate on Nigeria export and imported goods
Nigeria currency has fallen against US dollars steadily from 2015 to March 2017. The gap of exchange rate at parallel market is wide compare to the official rate with Central bank of Nigeria; most importers in Nigeria cannot access dollars at official rate. This made it hard for importers of goods, raw materials to ship goods to Nigeria. The current recession in Nigeria showed up because of scarcity of US dollars at official exchange rate.
Exporters of goods are force to receive their money after exportation in official currency. They are not allowed to withdraw currency from banks in order to use parallel exchange rate conversion. Most exporters love to take advantage of the fall on naira against US dollars.
List of effects of Pounds Euro dollar exchange rate on imported goods
US dollar has been the main cause of high cost of prices of products in Nigeria today. Many market women, traders and merchants will tell you that price of products are high because of dollar. This is because dollar dominated the purchasing currency for most transactions like online shopping, money transfer, online bills like school fees, medical charges and others.
- Increase Nigeria Customs import duties exchange rate – As a customs agent in Nigeria, I noticed a change in pounds, euro dollar exchange rate on the Pre-Arrival Assessment Report. The rate was like 8% increase on currency rate. This will affect the price of the products imported into Nigeria whether raw material or consumable ones.
- Inflation in Commodities purchase price – This is the end results of fall in naira as local currency in Nigeria against Euro Dollar exchange rate. Prices of goods whether imported or locally made will increase. Nigerians will experience this since most productions locally depend on pounds euro dollar exchange rate for purchase. This is the economic recession situation in Nigeria since August 2015 till March 2017. The central bank and Federal Government need to take control of the exchange rate of the forex currencies rates in bridge the gap between the parallel market and official currencies rate.
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