In a press release by the Central Bank of Nigeria on Thursday, it was announced that the restriction placed on importers of 43 items from accessing forex at the official window has been removed.
According to the circular which was signed by Isa Abdul Mumin, the Director of Corporate Communications at the CBN, “Importers of all the 43 items previously restricted by the 2015 Circular referenced TED/FEM/FPC/GEN/01/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.”
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The surprise move by the CBN is presumed to be part of efforts to stem the rapid depreciation of the Naira at the parallel market, considering the restrictions placed on those items have constituted a blockade in the seamless flow of forex in the country.
According to the 2015 circular, some of the items not valid for FOREX at the official window included: food items such as rice, margarine, meat and processed meat products, tinned fish (geisha/sardine). Other items on the list included, palm oil/vegetable oils, steel sheets (cold roiled/galvanized), steel drums, steel pipes, toothpicks, clothes, textiles, poultry, roofing sheets, among other items.
In the press release which was titled, “CBN Restates Commitment To Boost Liquidity in FOREX Market”, the apex bank restated its commitment to allow market forces determine the exchange rate based on a “Willing Buyer – Willing Seller” principle.
The CBN also noted that as part of efforts of boost liquidity and ensure price stability, it was going to be intervening in the market from time to time.
According to AbokiFX, the Naira was selling for N1040/$ at the parallel market as of October 12. However, on the CBN’s website, the exchange rate was N770/$, signalling a disparity of N270 between the official rate and the parallel market rate.
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With the widening disparity, the goal of the CBN to attain a single FX market has been put in limbo. Although, the depreciating exchange rate was blamed on the FX backlog which the Minister of Finance, Wale Edun put at about $6.87 billion last month.
