As Buhari Raises Prospect of Forex Market Rules Review

Source: THIS DAY LIVE

President Muhammadu Buhari’s assurance of a review of foreign exchange market rules came at a point when the various restrictive policies put in place by the Central Bank of Nigeria to avert a free fall of the naira appeared to have reached a saturation point, reports Festus Akanbi

There are strong indications that a chain of restrictive policies  churned out by the Central Bank of Nigeria in the foreign exchange market since the beginning of the year has fully run its course. As the apex bank continues to tighten the noose around banks in the area of foreign exchange management, the banks on the other hands are left with no choice but to adopt some survival moves, the latest being the recent restriction on the use of debit cards outside the shore of the country, among others.

Presidential Intervention

However, the assurance given by President Muhammadu Buhari during last week’s budget 2016 presentation will no doubt douse the tension and raise the prospect of a speedy review of foreign exchange rules in Nigeria.

The President said he was aware of the problems many Nigerians currently have in accessing foreign exchange for their various purposes – from traders and business operators who rely on imported inputs to manufacturers who want to import sophisticated equipment and spare parts; to our airlines operators who need foreign exchange to meet their international regulatory obligations; to the financial services sector and capital markets who are key actors in the global arena.

According to him, these are clearly due to the current inadequacies in the supply of foreign exchange to Nigerians who need it. He however quoted the Central Bank Governor, Mr. Godwin Emefiele, as assuring him that the bank is currently fine-tuning its foreign exchange management to introduce some flexibility and encourage additional inflow of foreign currency to help ease the pressure.

He said, “We are carefully assessing our exchange rate regime keeping in mind our willingness to attract foreign investors but at the same time, managing and controlling inflation to a level that will not harm the average Nigerians. Nigeria is open for business. But the interest of all Nigerians must be protected. Indeed, tough decisions will have to be made. But this does not necessarily mean increasing the level of pain already being experienced by most Nigerians.

“So to the investors, business owners and industrialists, we are aware of your pains. To the farmers, traders and entrepreneurs, we also hear you. The status quo cannot continue. The rent seeking will stop. The artificial current demand will end. Our monetary, fiscal and social development policies are aligned,” the President said.