The Central Bank of Nigeria (CBN) has finally relaxed the foreign exchange restrictions imposed eight years ago on importers of 43 products.
The CBN announced a substantial change in foreign exchange market policy in a statement signed by Dr. Isa AbdulMumin, the bank’s director of corporate communications.
Importers who were previously barred from purchasing foreign currency for 43 specific items, as detailed in the 2015 Circular TED/FEFPC/GEN/O1/010 and its addendums, are now permitted to participate in the Nigerian Foreign Exchange Market to purchase foreign currency for their transactions.
The Central Bank of Nigeria (CBN) had banned access to Forex from the FX market for the following 43 commodities as of October 2021: rice, cement, margarine, palm kernel, palm oil products and vegetable oils, meat and processed meat products, and vegetables and processed vegetable products.
Poultry and processed poultry products are among the others. Geisha-style canned fish/sardines Steel sheets that have been cold rolled Sheets of galvanized steel, Roofing materials, Wheelbarrows, head pans, metal bins and containers, and so on Enamelware, Steel drums, steel pipes, wire rods (deformed and not deformed), iron rods, and reinforcing bars are all examples of steel products.
Wire mesh, steel nails, security and razor fences and poles, wood particle boards and panels, wood fiberboards and panels, plywood boards and panels, wooden doors, toothpicks, glass and glassware, kitchen utensils, tableware, and tiles-vitrified and ceramic were included on the list.
Clothes, Textiles, Woven fabrics Products made of plastic and rubber, polypropylene granules, cellophane wraps and bags Cosmetics and soap, Tomato pastes and sauces, Eurobond/foreign currency bond/share purchases, Piston crowns Bearings, ball, There were also high voltage cables, transformers/switch gears, and gas cylinders on the list.
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According to AbdulMumin, the CBN is actively working to alleviate the existing backlog of foreign exchange transactions, and the CBN is now in continuing conversations with various stakeholders to develop solutions and facilitate the clearance of this backlog.
The CBN’s long-term goal, he noted, is to develop a single foreign exchange market by simplifying and streamlining the Nigerian FX market.
He noted that the CBN is working with various market participants to achieve this goal, which would result in a more unified and efficient foreign exchange market in the country.
AbdulMumin stated that the CBN occasionally injects funds into the Nigerian Foreign Exchange Market to increase liquidity in order to preserve price stability in the country.
He predicted that as market conditions improve and become more stable, the frequency and scale of CBN interventions will diminish over time.
The statement reads: the Central Bank of Nigeria (CBN) will continue to promote orderliness and professional conduct by all participants in the Nigerian Foreign Exchange Market to ensure market forces determine exchange rates on a Willing Buyer – Willing Seller principle.
He said: “The CBN reiterates that the prevailing Foreign Exchange (FX) rates should be referenced from platforms such as the CBN website, FMDQ, and other recognised or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.
As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time. As market liquidity improves, these CBN interventions will gradually decrease.
He added: “Importers of all the 43 items previously restricted by the 2015 Circular referenced TED/FEFPC/GEN/O1/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.
“The CBN is committed to accelerating efforts to clear the FX backlog with existing participants and will continue dialogue with stakeholders to address the issue.”
The CBN has set as one of its goals the attainment of a single FX market. Consultation is ongoing with market participants to achieve this goal. Participants and the general public are to be guided by the above.