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After the Central Bank of Nigeria (CBN) lifted the forex ban on 43 items, the Investor & Exporter (I&E) forex window saw a turnover of $53.02 million on Friday.
The CBN announced the removal of the ban on importers of 43 items that were previously restricted from accessing foreign exchange on its official platform. This decision was communicated through a statement titled ‘CBN Restates Commitment to Boost Liquidity in Forex Market,’ and was signed by Isa AbdulMumin, the Director of Corporate Communications at the CBN.
The statement explained, “Importers of all the 43 items previously restricted by the 2015 circular referenced TED/FEM/FPC/GEN/01/010, and its addendums, are now allowed to purchase foreign exchange in the Nigerian foreign exchange market.”
Data obtained from the FMDQ on Friday showed that there was no significant improvement in turnover on the official trading platform, as it recorded a turnover of $53.02 million, down from $60.30 million reported on Tuesday.
However, the naira experienced a slight appreciation, with an exchange rate of 764.86 naira per dollar, compared to 766.70 naira per dollar on Thursday.
Analysts at Cordros Securities commented in a report on Friday regarding the removal of the forex ban, stating, “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, especially since the FX queue is expected to lengthen at the official market due to a lack of liquidity.”
“Perhaps this is a signaling tool by the CBN to shift attention away from the parallel market and reduce the pressure on the official market, thus preventing a catch-up game with the unofficial exchange rate.”
“Consequently, we anticipate that FX pressures will increase in the official market in the short term, while the parallel market rate is likely to appreciate as importers of these 43 items transition to the official market.”
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