The Investor and Exporter (I&E) forex window saw an impressive turnover of $53.02 million, on Friday, October 13.
This surge came shortly after the Central Bank of Nigeria (CBN) lifted its forex restrictions on 43 specific items.
The CBN’s decision to remove the ban on importers of these 43 items, previously denied access to foreign exchange on the official platform, was announced on Thursday, October 12.
This move was conveyed through an official statement titled: ‘CBN Restates Commitment to Boost Liquidity in Forex Market,’ signed by Mr. Isa AbdulMumin, the Director of Corporate Communications.
The statement explicitly stated: “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.”
Figures retrieved from the FMDQ on the same day, Friday, October 13, revealed the notable increase in turnover at the I&E window, reaching $53.02 million, up from $60.30 million reported on Tuesday, October 10. Although the official trading platform showed improvement, it wasnot a substantial rise.
Simultaneously, the value of the naira experienced a slight boost, with the exchange rate shifting from 766.70/$ on Thursday, October 12, to 764.86/$ on the following day.
Financial analysts at Cordros Securities provided insight on the forex ban lift in a report published on Friday, October 13. They noted: “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, more so that the FX queue will now be longer at the official market without liquidity.”
The report continued: “Perhaps this is a signaling tool by the CBN to shift attention away from the parallel market and reduce the pressure of the official market playing a catch-up game with the unofficial exchange rate. Hence, in terms of impact, we think FX pressures will increase in the official market in the near term, while the parallel market rate is likely to appreciate as the importers of these 43 items move to the official market.”
