CBN’s Forex Ban Lift Boosts I&E Window Turnover to $53.02m

The Central Bank of Nigeria (CBN) has announced that it has lifted the forex ban on 43 items that were previously restricted from accessing foreign exchange on its official platform. The move is aimed at boosting liquidity in the forex market and easing the pressure on the naira.

The CBN said in a statement that importers of the 43 items, which include rice, cement, textiles, fertilizers, and others, can now purchase foreign exchange in the Nigerian foreign exchange market. The statement was signed by the Director of Corporate Communications, Isa AbdulMumin.

However, the lifting of the forex ban did not improve the turnover on the Investor & Exporter forex window, which is the official trading platform for foreign exchange transactions. According to data from the FMDQ, the I&E window recorded a turnover of $53.02m on Friday, down from $60.30m on Tuesday.

The naira appreciated slightly against the dollar at the I&E window, as it exchanged at 764.86/onFriday,comparedto766.70/ on Thursday.

Analysts at Cordros Securities said that while the lifting of the forex ban was a positive step, it was not enough to address the forex liquidity challenge in the country. They said that the demand for foreign exchange would increase at the official market as more importers seek to access it, while the supply would remain constrained by low oil prices and production.

They also said that the CBN might be trying to divert attention from the parallel market, where the naira has been trading at over 1,000/$, and reduce the gap between the official and unofficial exchange rates.

They said, “In our view, while this is another step forward, we think FX liquidity should take prominence to avoid further FX pressures at the official and parallel markets, more so that the FX queue will now be longer at the official market without liquidity.

“Perhaps this is a signalling tool by the CBN to shift attention away from the parallel market and reduce the pressure of the official market playing a catch-up game with the unofficial exchange rate.

“Hence, in terms of impact, we think FX pressures will increase in the official market in the near term, while the parallel market rate is likely to appreciate as the importers of these 43 items move to the official market.”

Newsflash Nigeria is an online newspaper that is developed and written exclusively for Nigerians. It’s packed with up-to-the-minute Local and National Economy News, Share & Capital Market, Health, Sports, Education, Technology, Business and Opinions.

To make further advert enquiries or place an order, please contact us at [email protected] and +2348053316946 and WhatsApp number 08033546732