Forex: CBN Lifts Ban on 43 Items

As part of a move to bolster liquidity in the foreign exchange (FX) market, the Central Bank of Nigeria (CBN) has taken a significant step by lifting the ban on all 43 items that were previously restricted from purchasing foreign exchange.

This momentous development was officially communicated by the CBN through a statement released by its Director of Corporate Communications, Dr. Isa AbdulMumin, on Thursday.

Dr. AbdulMumin underlined that importers of the 43 items, which were initially restricted in 2015, are now permitted to access foreign exchange in the Nigerian FX market. This move aligns with the CBN’s commitment to fostering a market environment characterized by orderliness and professional conduct among all participants.

Furthermore, the CBN emphasized that its objective is to allow market dynamics to dictate exchange rates based on a “Willing Buyer-Willing Seller” framework. Dr. AbdulMumin stated, “The CBN reiterates that the prevailing FX rates should be referenced from platforms such as the CBN website, FMDQ, and other recognized or appointed trading systems. This is to promote price discovery, transparency, and credibility in the FX rates.”

In addition, the CBN highlighted its responsibility to ensure price stability and stated its intention to periodically intervene in the Nigerian FX market to enhance liquidity. Dr. AbdulMumin also mentioned that as market liquidity improves, the CBN’s interventions will be gradually scaled back.

The CBN’s commitment to addressing the existing FX backlog with stakeholders and pursuing the goal of achieving a unified FX market was reaffirmed by Dr. AbdulMumin, who noted, “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 CBN has set as one of its goals the attainment of a single FX market. Consultation is ongoing with market participants to achieve this goal.”

This move by the CBN is anticipated to have a significant impact on the Nigerian foreign exchange market, enhancing liquidity and aligning with broader economic stability goals.