The Central Bank of Nigeria (CBN) has lifted foreign exchange restrictions on 43 items, allowing importers to purchase foreign exchange in the Nigerian Foreign Exchange Market. This decision, effective from October 12, 2023, aims to promote a market-driven exchange rate system based on the “Willing Buyer – Willing Seller” principle. The CBN is committed to addressing the FX backlog and consulting with stakeholders to achieve a single FX market.
Key Points:
- The CBN’s circular issued on October 12, 2023, lifts foreign exchange market restrictions on 43 items previously restricted since 2015.
- The move is intended to enhance liquidity in the Nigerian Foreign Exchange Market and promote a market-driven exchange rate system.
- The CBN emphasizes the “Willing Buyer – Willing Seller” principle and commits to reducing interventions as market liquidity improves.
Analysis: The Central Bank of Nigeria’s decision to remove forex restrictions on 43 items represents a significant shift towards a more market-driven exchange rate system. By allowing importers to access foreign exchange for these items, the CBN aims to stimulate economic activity and improve liquidity in the foreign exchange market. This move is likely to have positive effects on businesses and industries that rely on these items for their operations. Additionally, the commitment to reducing interventions indicates the CBN’s confidence in the market’s ability to determine exchange rates. The ongoing consultation with market participants to achieve a single FX market reflects the central bank’s dedication to enhancing the efficiency and transparency of Nigeria’s foreign exchange market.
