Mohammed Shosanya
The Central Bank of Nigeria (CBN) lifted the ban on 43 products from accessing foreign exchange (forex) because the restriction pushed importers into the parallel market and increased the surplus demand for forex.
The development weakened the parallel-market exchange rate and pushed up prices, it said in a circular, adding thatit wants to unify the market for forex with flexible and transparent pricing.
It said:“The CBN wants to promote orderliness and professional conduct by all Nigerian foreign exchange market participants to ensure market forces determine exchange rates on a willing buyer – willing seller principle.
“The CBN wants to ensure price stability and is seeking to boost liquidity in the Nigerian foreign exchange market. As liquidity improves, we expect the distortions to moderate.”
It added that the implication of the removal would make monetary policies effective, reduce the inflation rate and eliminate the need for importers of these products to go to the parallel market.
It said, “Local production will benefit from cheaper imported inputs, and consumers will benefit from cheaper retail products. It is expected that employment generation will be boosted as closed factories re-open. Price stability will benefit the economy and the standard of living in general.”
