Nairametrics|Despite criticism from various quarters, the Central Bank of Nigeria will continue with its present foreign exchange policy. The apex bank also plans to expand the list of banned goods. Central Bank Governor, Godwin Emiefele stated this during the Monetary Policy Committee (MPC) meeting held last week.
The CBN in August 2015 banned 41 items from accessing foreign exchange in the Nigerian Foreign Exchange markets. Importers of such items were left with the option of sourcing forex from either the parallel market or bureau de change. The decision is seen by many as one of the reasons why forex scarcity has persisted for almost two years now and why the exchange rate disparity between the parallel and official market(s) continue to widen.
The Central Bank, in a statement released last week, insisted that its forex policy would set the nation on the right path of boosting local production, creating employment and growth. It also claimed that Intelligence reports at its disposal, reveal that certain individuals were funding the push for the bank to reverse its policy.
The Central Bank has come under increased criticism over its handling of the forex policy. There have protest organised requesting that the Central Bank Governor resign. Foreign portfolio investors, relied upon by Nigeria to boost forex liquidity remain skeptical to re-enter the capital market. FPI data for the first three-quarters of 2016 shows Nigeria attracted about $1.5 billion compared to about $5 billion same time in 2015.
Apart from banning 41 items, the CBN has also put in place forex restrictions on the outflow of forex by Nigerians. This is thought to have increased forex trade in the black market as most companies who would have otherwise repatriated the money into Nigeria will rather not pass through the official window but sell via the black market.