HomeBUSINESSCBN Will Relax Prohibition on 43 Items And Intervene In FX Market

CBN Will Relax Prohibition on 43 Items And Intervene In FX Market

In a strategic move to strengthen the foreign exchange market, the Central Bank of Nigeria (CBN) has disclosed a dynamic plan that promises to enhance liquidity from time to time.

This remarkable decision revealed in a recent statement, signifies a proactive approach to stabilize the market, with a commitment to gradually reducing interventions as liquidity improves.

What’s more, the CBN has made a pivotal announcement by lifting the ban on 43 previously restricted items from accessing foreign exchange. 

This development is a significant step, especially given the recent turbulence in the foreign exchange market following the integration of all trading windows into the investors’ and exporters’ (I&E) window – the official FX marketplace.

The naira’s recent record-low exchange rate against the dollar in street markets is indicative of the urgency for these measures. The apex bank has shown its determination to ensure market forces dictate exchange rates, operating on the principle of willing buyers and sellers.

As the CBN reinforces its commitment to price stability, it vows to inject liquidity into the Nigerian Foreign Exchange Market through timely interventions while progressively scaling back as market conditions improve. This not only ensures stability but also creates an environment that fosters price discovery, transparency, and credibility in FX rates.

Furthermore, the CBN’s decision to permit importers of previously restricted items to purchase foreign exchange in the Nigerian market at “cheaper rates” is a game-changer. This policy change is set to have a profound impact on businesses dealing in items like rice, cement, vegetable oils, poultry, cosmetics, and more.

The CBN’s vision of a single FX market is not only ambitious but also well underway. The bank is actively engaging with market participants to bring this aspiration to fruition.

In essence, the Central Bank of Nigeria’s strategic interventions and policy shifts are aimed at reawakening the foreign exchange market, offering stability and opportunities for growth while laying the groundwork for a unified FX market in the future. This marks a crucial step toward a brighter economic outlook for Nigeria and its businesses.

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