Nigeria’s Central Bank of Nigeria (CBN) has perfected plans to rejig forex restrictions‎ in the country.



An insider source within the presidency told Naijadefender that the new rules will allow customers deposit foreign exchange in cash directly into local banks while the CBN will no longer sell forex directly to Bureau De Change operators in the country.

Investigations by Naijadefender further revealed that part of steps being taken by the CBN to reduce the pressure on the naira, which has been under pressure against major foreign currencies in the parallel market.

Nigerian banks started rejecting cash deposits in foreign currencies into domiciliary accounts a few months back because they felt that the level of forex that they had in their vaults was above the optimum level that they could manage. The CBN had backed the decision.

Naijadefender recalled that the Central Bank of Nigeria (CBN) has pledged to meet the foreign exchange requirements for the importation of equipment to the Dangote refinery, petrochemical and fertilizer plant, which is being constructed by the Dangote Group at the cost of almost $14 billion.
Speaking yesterday at the project site in Dangote Free Trade Zone in Lekki area of Lagos, the Governor of CBN, Mr. Godwin Emefiele, stated that when completed, the project would generate $6 billion for Nigerian economy yearly.

Emefiele added that the project would also help the central bank to conserve foreign exchange as close to 40 per cent of the foreign exchange used currently to import fertiliser, petroleum products and petrochemicals would be saved.

Naijadefender learnt that apart from the call made in the open by the Senate President during last week’s audience with the IMF boss on the CBN, it has also been revealed that Lagarde pointed out, in unequivocal terms, the dangers of the continued forex policy instituted by the apex bank in the last eight months.

During the closed door sessions between the CBN governor, Godwin Emefiele, and Senate President Saraki on the one hand, and another with Ms Lagarde, there appeared to be a drift towards a consensual position on the restrictive forex policy.

Although Emefiele, according to a source at the private sessions, did not give away much regarding the apex bank’s possibility of a policy review, Naijadefender was made to believe at the weekend that in the light of the expected visit from IMF economists this week, the policy may be relaxed.

The foreign exchange market witnessed introduction of several foreign exchange restrictions in 2015. The first notable restriction was the closure of official foreign exchange market (Retail Dutch Auction) on February 18, 2015 which translated to further devaluation of the naira to N197 per dollar from N165 per dollar.

he second notable restriction was the Exclusion of 41items from the official foreign exchange market.

Then, in August, the CBN banned acceptance of foreign currency deposit into domiciliary accounts.

In addition to the above, there was the reduction in the limit on usage of naira debit cards abroad. From $150,000 per annum the limit was pegged at $50,000 per annum per naira debit card. The daily cash withdrawal limit was pegged at $300 abroad.

During the year, the CBN banned banks from selling foreign exchange to the Bureau De Change (BDCs) while it revised the operating guidelines of BDCs, and in the process, banned any form of relationship of street hawkers of foreign currency (black market), and branch operations.

These restrictions coupled with dwindling foreign currency inflow due to continued decline in crude oil prices, as well as continued expectation of further devaluation of the naira, led to a consequential depreciation of the naira in the parallel market. The parallel market exchange rate of the naira rose from N179/N185 at the beginning of 2015, to close the year at N280 to a dollar.

And indeed, as a team of economists from the International Monetary Fund, IMF, are set to arrive Nigeria this week, there are indications that the executive and the legislative arms of government may have begun a process of horse trading with a view to making the 2016 Appropriation Bill, more implementable

Source:
https://naijadefender.

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