CBN Could Ease Forex Controls

Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), has said that he will consider easing restrictions on currency trading if demand for foreign exchange drops further, The Punch reports.

On Monday, October 5, the governor said at a conference on Africa in London that the controls were necessary and were working to limit the demand for dollars. He also added that the CBN had little choice in imposing the curbs in order to preserve foreign-currency reserves.

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Emefiele noted: “Once we have achieved a result we can allow ourselves to look at a freer market.”

Emefiele imposed restrictions on trading and introduced bans on purchases of dollars by certain importers after the naira plunged to a record low in February following a drop in oil revenue.

The source says that with the backing of President Muhammadu Buhari, Emefiele has resisted calls to ease the controls and devalue the naira despite criticism from investors, businesses and fellow members of the Monetary Policy Committee.

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The restrictions have reduced liquidity, prompting JPMorgan Chase to remove the nation’s bonds from its emerging-market bond indexes last month.

Emefiele said: “I think it’s working and I think you should be patient with us. Demand for foreign exchange has dropped.”

The naira traded weaker in the parallel market to 223 on Monday.

Source: Legit.ng