Why FG Opted For N800/Dollar Exchange Rate For 2024 Budget – Minister

The Federal Government disclosed on Thursday that it opted for a N800-to-dollar exchange rate in the 2024 Appropriation Act after examining the naira’s average performance.

It said it avoided basing the foreign exchange benchmark in the 2024 budget on a spot rate, to avoid eventualities and uncertainties.

Speaking with State House media, Minister of Budget and National Planning Atiku Bagudu clarified that the National Assembly had increased the estimated exchange rate of N750 to the dollar in the 2024 budget, which had been used by the federal government earlier.

Naija News reports that the minister noted that the FG is positive that its current measures would soon yield a significant increase in the supply of foreign exchange in the economy.

The minister added that Tinubu respected democracy and institutions, which is why he approved of the National Assembly’s decision to increase the rate.

Bagudu said, “For budgeting purposes, you don’t use the spot rate of anything. Oil prices can go to 120 today, maybe there is a shortage, or maybe there is a collision between two ships that will block a channel.

“It would be foolish to use that as a reference price, I should take a period maybe six months to one year and say let me observe this average behaviour, so you don’t use spot prices. So even with the exchange rate, it is like that.

“Much as we are hoping that it would soon come below, but at the time you are doing the budget, you will take a view on average performance. And that’s what we took.

“We took an average performance of N750 on the executive side and we proposed it to the National Assembly.

“So, he respected democracy that even though it was higher than what he submitted, but the institution that says so has the authority to say so and even at the time they say 100 because it’s not an official rate it’s tidal because, with the deregulated market, you no longer have an official rate, it is much lower than even the way the markets are bidding.”