CBN to Increase List of Restricted Items from Forex Market

The governor of the Central Bank of Nigeria (CBN), Mr. Godwin Ifeanyi Emefiele said the apex bank may increase the number of items excluded from funding at the official foreign exchange rate in an effort to reduce pressure on the naira and preserve the nation external reserves.

The apex bank recently barred importers of 41 items from funding their business at the official forex rate, the governor said this restriction would help resuscitate domestic businesses and improve overall employment generally. Some of the 41 items include rice, wheelbarrows, head pans, cement, margarine, palm kernel/vegetable oil, meat and processed meat products, toothpicks, private airplanes/jet, Indian incense among others.

Speaking with Thisday reporter, Emefiele said “We are not saying that those 41 items cannot be imported, but we are saying that we don’t have the foreign exchange for you at the banks or at the interbank market for these”. “If you have a foreign exchange from other sources, you must show us your proof of funds and where those funds are coming from. If you do not show us your proof of funds and you want to open a non-valid Form M, we would reject it.”

Members of the Lagos Chamber of Commerce and Industry (LCCI) are already kicking against the policy and believe that the central bank would review its policy with time, the governor said “there is nothing to be reviewed because those items were well thought out”.

“The truth is that as long as we find that there are more items that can be produced locally, I can assure you that we would increase the list”.

The governor also explained that it was not the central bank that directed commercial banks in the country to stop accepting foreign currency deposits, but expressed his support for the decision, saying Nigeria is the only country where people go to banks and deposit foreign currencies other than the local currency.

Bank all over the country has been rejecting foreign currency deposits by domiciliary account holders since last week.

The governor said foreign currency deposited into domiciliary accounts prior to this notice will not be eligible for outward transfers but can be withdrawn as cash.

“Please note that this temporary measure does not affect the electronic transfer of funds into or from your domiciliary accounts and, you will continue to have access to foreign currency cash withdrawals from your account” he reiterated.

“Whilst we have had to take this step to temporarily suspend foreign currency cash deposits, we would like to assure you that we are working hard at finding alternative outlets and a quick solution to this situation.”