European Union, Others laud CBN’s New Flexible Exchange Rate Regime

CENTRAL Bank of Nigeria (CBN) on Thursday received encomiums from the European Union (EU) and the Lagos Chamber of Commerce & Industry (LCCI) on the new flexible exchange rate regime which is now to be determined by the market forces as against the earlier dictatorial technique leading to uncertainties in the forex market.

The Head of Trade & Economics, EU Delegation to Nigeria and West Africa, Mr. Fillippo Amato, said the new policy is an indication that the present government is sincerely determined to resuscitating the economy adding that the new policy will amazingly attract huge investments into the economy in no distant time as the investors’ confidence has been restored.

Amato added that the policy will attract prospective foreign investors, who were in dilemma to invest over the recent adverse situations in the country and thereby withheld funds but with the latest development, will have no choice than to invest comfortably and hugely since the value of the country’s currency would henceforth be determined by their activities in the field and not by any institution or persons.

Similarly, the Organised Private Sector (OPS) under the auspices of the Lagos Chamber of Commerce & Industry (LCCI) said the decision will make the local economy more attractive and stimulate growth.

 According to LCCI’s Director- General, Mr. Muda Yusuf, the policy was in line with the position consistently canvassed by the OPS in the past 18 months adding that the policy will enhance the flow of foreign currencies into the forex market from capital importation, export proceeds and Diaspora remittances.

“The policy is a major incentive to exporters as they will have unfettered access to their export proceeds. Besides, the Federation Account will benefit from better revenue inflows from the CBN as sale of subsidized forex comes to an end,” Yusuf said.

However, it criticized the exclusion of 41 items from forex market stating that many of the items on the list are essential inputs for industries which if not reviewed will continue to have adverse effects particularly job losses in the manufacturing,  distributive trade  and maritime sectors, and therefore may encourage smuggling.