Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele has said the apex bank would consider relaxing restrictions on foreign exchange transactions in the country if there was a drop in demand for dollars.
Speaking at a conference in London on Monday, Emefiele said the restrictions put in place in June to conserve foreign exchange reserves and support the Naira were working.
He said: “CBN had little choice in imposing the curbs in order to preserve foreign reserves.
“Once we have achieved a result, we can allow ourselves to look at a freer market. I think it is working and you should be patient with us. Demand for foreign exchange has dropped.”
The restrictions have reduced liquidity in the market, prompting JPMorgan Chase & Co. to remove the nation’s bonds from its emerging market bond indexes last month.
Recall that CBN had, on June 23, issued a circular excluding importers of 41 goods and services from accessing foreign currencies at the Nigerian foreign exchange markets, after the Naira plunged to a record low in February, following a drop in oil revenue.
The implication of the policy is that all importers, who want to continue bringing in these goods or services into the country, have to source their foreign exchange from private sources.
CBN said the move was to help reduce pressure on the local currency, while preserving the nation’s external reserves.
It said the items cannot be funded at the interbank from proceeds of exports and Bureau de change sources.
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