- CBN to intervene in FX market, lifts ban on 43 items
BY FESTUS OKOROMADU, ABUJA
The Governor of the Central Bank of Nigeria, Yemi Cardoso, has said that the economic policy proposals of President Bola Tinubu’s administration can achieve a Gross Domestic Product of $1 trillion in eight years.
The declaration was made on Thursday by Cardoso in Marrakesh, Western Morocco on the side-line of the on-going 2023 World Bank/IMF Annual Meetings.
Cardoso said efforts were on-going to refocus the CBN for overall economic growth, adding that the government would identify fiscal reforms and growth targets that would achieve the feat within eight years.
He said that in a study of emerging markets, macro-economic indices pointed to Nigeria’s economic trajectory, given the faithful implementation of the proposed economic reforms.
He explained that the study followed a review of economies like Brazil, Russia, India, China and South Africa, BRICS, and Mexico, Indonesia, Nigeria, and Turkey, MINT, countries with similar populations and developmental characteristics as Nigeria.
The CBN boss said that the apex bank will stop its development financing initiatives and focus more on advisory roles.
He said, “In economies bigger than $1.0 trillion, these indicators include moderate inflation, sizable foreign reserves, and the capacity to quickly rebound from a cyclical economic downturn.
“Given this, a refocused CBN will better serve Nigeria through monetary policy interventions and advisory roles that sustain implementation of the administration’s fiscal proposals.
He said also that the lines between monetary policy and fiscal intervention should be clearly delineated, and the CBN needed to be pulled back from its development financing initiatives to more advisory roles.
The CBN Governor added that, “Much had been made of past CBN forays into development financing, such that the lines between monetary policy and fiscal intervention have blurred.
“In refocusing the CBN to its core mandate, there is a need to pull it back from direct development finance interventions into more limited advisory roles that support economic growth.
“The bank should act as a catalyst in the propagation of specialised institutions and financial products that support emerging sectors of the economy.
“It should facilitate a new regulatory framework to unlock dormant capital in land and property holdings.”
He listed other roles of the CBN to include accelerating access to consumer credit and expansion of
financial inclusion for the masses.
The CBN has also announced plans to improve liquidity in the foreign exchange market by intervening from time to time.
The apex bank also announced the lifting of the ban on 43 items previously restricted from purchasing forex.
The bank in a statement on Thursday titled, “CBN restates commitment to boost liquidity in the forex market,” said it will continue to promote orderliness and professionalism by all participants in the Nigerian Foreign Exchange (forex) Market to ensure market forces determine exchange rate on a willing buyer willing seller principle.
Part of the statement signed by CBN Director of Corporate Communication, Isa AbdulMunmin read, “The CBN reiterates that the prevailing Foreign Exchange (FX) rates should be referenced from platforms such as the CBN website, FMDQ, and other recognised or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.
“As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time. As market liquidity improves, these CBN interventions will gradually decrease.
“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.
“The CBN is committed to accelerating efforts to clear the FX backlog with existing participants and will continue dialogue with stakeholders to address the issue.
“The CBN has set as one of its goals the attainment of a single FX market. Consultation is ongoing with market participants to achieve this goal. Participants and the general public are to be guided by the above.”
