The Central Bank of Nigeria (CBN) in a bid to boost liquidity in the foreign exchange (FX) market announced the lifting of ban on 43 items previously restricted from accessing forex. The decision comes amid high levels of volatility experienced in the FX market following the unification of all trading windows into the investors’ and exporters’ (I&E) window - the official FX market.
Under the new guidelines, the CBN said it will be championing the ‘Willing Buyer – Willing Seller’ principle, emphasizing its commitment to a market-driven exchange rate system.
On Wednesday, the naira fell to a new all-time low, trading at N1,045 to the dollar in the black market. The depreciation was sustained at the official market at N776.
The CBN ban, which covered items such as rice, cement and poultry, was imposed as part of the unconventional policies under former central bank Governor Godwin Emefiele in an effort to prop up the naira currency.
Different economic experts and organisations have repeatedly advised the CBN to remove the forex restrictions.
Earlier in the week, Citigroup said that the restrictions placed on foreign exchange provisions for those 43 items by the CBN must go if the country was to fix the challenges plaguing the forex market.
Some of the affected items include rice, cement, margarine, palm kernel, pal oil products, vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry, tomatoes/tomato paste, soap, cosmetics, and head pans.
The lifting of the ban means that importers of these items can now freely purchase forex from the official window at ‘cheaper rates’.
