CBN Lifts Forex Ban On 43 Items

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The restrictions on foreign exchange that the Central Bank of Nigeria (CBN) imposed on importers of 43 items eight years ago have finally been lifted.

The CBN claimed that a significant change had been made to the bank’s foreign exchange market policy in a statement signed by Dr. Isa AbdulMumin, the director of corporate communications.

As stated in the 2015 Circular TED/FEFPC/GEN/O1/010 and its addenda, importers who were previously prohibited from purchasing foreign currency for 43 specific items are now permitted to participate in the Nigerian Foreign Exchange Market to purchase foreign currency for their transactions.

The following 43 products had their access to foreign exchange from the FX market restricted by the Central Bank of Nigeria (CBN) as of October 2021: rice, cement, margarine, palm kernel, palm oil products, and vegetable oils; meat and processed meat products; and vegetables and processed vegetable products.

Other examples include poultry and processed poultry products, canned fish in sauce (Geisha) and sardines, cold-rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes and containers, enamelware, steel drums, steel pipes, wire rods (deformed and not deformed), iron rods, and reinforcing bars.

The list also included wire mesh, steel nails, security and razor fencing and poles, wood particle boards and panels, wood fiberboards and panels, plywood boards and panels, wooden doors, glass and glassware, kitchen utensils, tableware, and ceramic and vitrified tiles.

The list also included items like Piston crowns, Ball bearings, High voltage cables, Transformers/switch gears, Gas cylinders, Woven fabrics, Clothes, Plastic and rubber products, Polypropylene granules, Cellophane wrappers and bags, Soap and Cosmetics, Tomatoes/Tomato Pastes, and Eurobond/foreign currency bond/share purchases.

According to AbdulMumin, the CBN is actively trying to address the backlog of uncompleted foreign exchange transactions.

The CBN is currently having ongoing discussions with a variety of stakeholders in order to come up with solutions and make it easier to clear this backlog.

Creating a single foreign exchange market by streamlining and simplifying the FX market in Nigeria is one of the CBN’s long-term objectives, he added.

In order to achieve this goal, which would result in a more unified and effective foreign exchange market in the nation, the CBN is working in consultation with various market participants, according to what he said.

AbdulMumin claimed that the CBN periodically injects money into the Nigerian Foreign Exchange Market to increase liquidity in an effort to maintain price stability within the nation.

The frequency and size of these CBN interventions, according to him, will gradually decrease over time as market conditions strengthen and become more stable.

The statement reads: the Central Bank of Nigeria (CBN) will continue to promote orderliness and professional conduct by all participants in the Nigerian Foreign Exchange Market to ensure market forces determine exchange rates on a Willing Buyer – Willing Seller principle.

He said: “The CBN reiterates that the prevailing Foreign Exchange (FX) rates should be referenced from platforms such as the CBN website, FMDQ, and other recognised or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.

“As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time. As market liquidity improves, these CBN interventions will gradually decrease.

He added: “Importers of all the 43 items previously restricted by the 2015 Circular referenced TED/FEFPC/GEN/O1/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.

“The CBN is committed to accelerating efforts to clear the FX backlog with existing participants and will continue dialogue with stakeholders to address the issue.”

The creation of a single FX market is one of the CBN’s objectives. Market participants are currently being consulted in order to accomplish this.

The preceding should serve as a guide for participants and members of the public.

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