CBN to address challenges of forex liberalisation policy
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To this end, they will be discussing and assessing the impact of the policy which began two years ago.
The forum, scheduled for this Friday, in Lagos, “will afford participants the opportunity to discuss the emerging issues and proffer appropriate policy inputs with a view to enhancing its efficiency,” the CBN stated on Monday.
The foreign exchange liberalisation policy was conceived in March 2006 to address the persistent depreciation of the naira, mainly attributed to the wide gap between the exchange rates of the naira to the dollar in the official and parallel markets.
Though the margin between the exchange official and parallel market exchange rates have reduced considerably, a major challenge facing the forex management remains the availability of funds, as the CBN gradually hands off supply of foreign exchange to banks.
Banks are allowed to obtain foreign exchange from external sources rather than depending fully on the apex bank to supply all that is required by end users.
The liberalisation of the foreign exchange among other things, gave BDC operators access to foreign exchange from the official market and at the official exchange rate by allowing them to bid directly at the Wholesale Dutch Auction System (WDAS).
The policy was to ensure that forex was readily available, thus eliminating the artificial scarcity witnessed in the past, which hitherto fueled round-tripping by many banks.
Other measures, which the CBN policy utilised to crash the exchange rates included the approval of a 100 per cent increase in the amount of Basic Travel Allowance (BTA) thus allowing a traveller to hold $5,000 per quarter per person.
The forum, scheduled for this Friday, in Lagos, “will afford participants the opportunity to discuss the emerging issues and proffer appropriate policy inputs with a view to enhancing its efficiency,” the CBN stated on Monday.
The foreign exchange liberalisation policy was conceived in March 2006 to address the persistent depreciation of the naira, mainly attributed to the wide gap between the exchange rates of the naira to the dollar in the official and parallel markets.
Though the margin between the exchange official and parallel market exchange rates have reduced considerably, a major challenge facing the forex management remains the availability of funds, as the CBN gradually hands off supply of foreign exchange to banks.
Banks are allowed to obtain foreign exchange from external sources rather than depending fully on the apex bank to supply all that is required by end users.
The liberalisation of the foreign exchange among other things, gave BDC operators access to foreign exchange from the official market and at the official exchange rate by allowing them to bid directly at the Wholesale Dutch Auction System (WDAS).
The policy was to ensure that forex was readily available, thus eliminating the artificial scarcity witnessed in the past, which hitherto fueled round-tripping by many banks.
Other measures, which the CBN policy utilised to crash the exchange rates included the approval of a 100 per cent increase in the amount of Basic Travel Allowance (BTA) thus allowing a traveller to hold $5,000 per quarter per person.
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