Atedo Peterside backs CBN on removal of FX restriction on 43 items

Atedo Peterside, the founder of Stanbic IBTC Bank Plc and Anap Foundation, says the Central Bank of Nigeria (CBN) made the right move to lift the ban on the 43 items initially restricted from accessing foreign exchange (FX).

Peterside’s position comes hours after the apex bank announced that importers of the items can now purchase FX from the country’s official market.

Some of the items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry, tomatoes/tomato paste, soap, cosmetics, and head pans.

The lifting of the ban means that importers of these items can now buy FX from the official window at ‘cheaper rates’.

Reacting to the development in an X post on Friday, Peterside said the financial regulator made the right call to discourage the use of FX policy as a determinant of profitability for importers.

“Attacking a problem at source: CBN is right (See Circular) to discourage use of FX policy as a determinant of which importer achieves what margin of profitability. That is the role of levies and tariffs,” the post reads.

“FX market exclusions only fuel the parallel market and widen arbitrage.”

Attacking a problem at source: @cenbank is right (See Circular) to discourage use of FX policy as a determinant of which importer achieves what margin of profitability. That is the role of levies & tariffs. FX market exclusions only fuel the parallel market & widen arbitrage pic.twitter.com/aTpqFQQMbj

— Atedo Peterside (@AtedoPeterside) October 13, 2023

Nigeria’s FX market has continued to fluctuate since the introduction of the unification of all trading windows into the investors’ and exporters’ (I&E) window — the official FX market.

On Wednesday, the naira fell to a new all-time low, trading at N1,045 to the dollar in the street markets. The depreciation was sustained at the official market at N776.

The CBN said the new policies are part of plans to stabilise the FX market, stating that it would boost liquidity in the market by intervening “from time to time”.

The apex bank said as market liquidity improves, its interventions will “gradually decrease”.