Why CBN lift FX ban on rice, cement, toothpicks and 40 oda items
Wia dis foto come from, Getty Images
Di Central Bank of Nigeria (CBN) don lift foreign exchange ban wey dem place on 43 items.
Wetin dis one mean be say importers of dis items fit get access to foreign exchange from di Nigerian foreign exchange market as di apex bank don lift di ban.
You go remember say for 2015, CBN bin restrict di importers of di items from accessing foreign exchange from di I&E window as dem tok say di items no dey valid for foreign exchange as na sometin wey dem fit produce for Nigeria.
Some of di items wey dey affected dat time include rice, cement, vegetable oils, margarine, amongst oda tins.
Di apex bank make di announcement for one press release on Thursday wey dia director of corporate communications sign.
For di press release, CBN tok say dem go ensure say dem boost liquidity for di Nigerian foreign exchange market as dem go intervene from time to time.
According to di CBN, as market liquidity improve, dia intervention go gradually decrease.
Di apex bank for di press release tok say dem go continue to promote orderliness and professional conduct by all participants for di Nigerian foreign exchange market to ensure say forces determine exchange rate on a willing buyer-willing seller principle.
End of Di one wey oda users dey read well well
"Di CBN dey committed to accelerate efforts to clear di FX backlog wit existing participants and go continue dialogue wit stakeholder to address di issue.
"Di CBN don set di attainment of a single FX market as one of dia goals. Consultations dey go on wit market participants to achieve dis goal," di apex bank tok.
Nigerian investment analyst Victor Aluyi wey follow BBC News Pidgin tok say im hope say di Central Bank of Nigeria go ensure say enough foreign exchange supply dey for dis items.
According to Aluyi, if CBN no dey able to provide supply for dis importers, e mean say dem go still make use of black market.
“In di absence of supply, I tink di situation go get worse, but if supply come true, e go give us respite wey we need.
“You remember say backlog still dey wey di CBN gatz take care of. Di long and short of di FX kasala we dey deal wit be say we no get enough dollars to provide supply or intervene for di market,” Aluyi tok.
E say e no expect say prices of commodities go go down or go up anytime soon and add say wetin im wan see in di coming weeks be weda CBN dey able to meet foreign exchange demands.
Why goment restrict di ban?
Di Central Bank of Nigeria tok say di restrictions bin push importers into di parallel market and e contribute to di surplus demand for foreign exchange. Dem say dis action weaken di parallel-market exchange rate and push up prices.
Di apex bank also tok say dem lift di restriction sake of say dem wan promote orderliness and professional conduct by all Nigerian foreign exchange market participants to ensutre market forces determine exhcnage rate on a willing buyer-willing seller principle.
Oda reasons na:
Sake of say di CBN want unifited market for forex wit flexible and transparent pricing.
Di CBN wan ensure price stability and dem dey seek to boost liquidiity for di Nigerian foreign exchange market. As liquidity improve, di CBN say dem expect make di distortions dey moderated.
Implications of removing di foreign exchange restriction
Di apex bank tok say wetin dem do go ensure say monetary policy tools become more effective wit di attainment of a unified, well-functioning market for foreign exchange, where pricing dey based on a willing-buyer and willing-seller system. CBN tok say wit dis, dem go fit realise dia core functions and mandates.
Dem say di willing-buyer and willing-seller system allow di exchange rate to adjust to clear di market and ensure say supply always dey.
"In recent months, di widening premium between di official rate and di parallel market indicate say di rate no dey set a clearing price," CBN tok.
Dem say removing dis restrictions eliminate di need for importers of dis products to go to di parallel market, and e go reduce pressure on di naira.
CBN also tok say di FX restriction bin get implication on inflation wey cause di prices of di affected goods to increase.
Full list of di items wey CBN lift foreign exchange ban ontop
Rice, cement, vegetable oils, palm kernel, palm oil products, margarine, meat and processed meat products, vegetables and processed vegetable products, poultry and processed poultry products, tinned fish in sauce (geisha)/sardine, cold rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows and head pans.
Odas na metal boxes and containers, enamelware, steel drums, steel pipes, wire rods (deformed and not deformed), iron rods, reinforcing bars, 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, toothpicks as well as.
Di oda items na glass and glassware, kitchen utensils, tableware, tiles-vitrified and ceramic, 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
How di restriction go benefit local production
Dii CBN tok say local production go benefit from cheaper imported inputs, and consumer go benefit from cheaper retail products.
Dem say di policy dey suitable for a unified forex market and dey positive for inflation.
"E dey expected say employment generation go dey boosted as closed factories go re-open. Price stability go benefit di economy and di standard of living in general," di apex bank tok.
