{"id":141,"date":"2016-05-31T09:05:17","date_gmt":"2016-05-31T08:05:17","guid":{"rendered":"http:\/\/nationaltimes.com.ng\/?p=141"},"modified":"2016-05-31T09:05:17","modified_gmt":"2016-05-31T08:05:17","slug":"cbns-flexibility-exchange-rate-will-enhance-forex-allocation-lcci","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/cbns-flexibility-exchange-rate-will-enhance-forex-allocation-lcci\/","title":{"rendered":"CBN\u2019s flexibility exchange rate will enhance forex allocation\u2014LCCI"},"content":{"rendered":"

Friday Ekeoba<\/p>\n

The Lagos Chamber of Commerce and Industry, LCCI has said that the\u00a0recent position of the Central Bank of Nigeria (CBN) to adopt a\u00a0flexible exchange rate regime will improve the efficiency of forex\u00a0allocation in the domestic economy.<\/p>\n

According to LCCI, the CBN\u2019s move will amongst others also cause a\u00a0reduction in the distortions that currently characterise the forex\u00a0market and bring the economy closer to equilibrium.<\/p>\n

In a statement obtained by National Times<\/a> yesterday, the Director\u00a0General LCCI, Mr. Muda Yusuf said the apex bank decision will further\u00a0improve liquidity in the forex market and also cause a reduction in the\u00a0current trade arrears.<\/p>\n

\u201cReduction in the arrears of remittances which has accumulated for the\u00a0past 18 months. Reduce uncertainty which investors have been grappling\u00a0with over the\u00a0last one year. Boost investors\u2019 confidence and attract greater FOREX\u00a0inflows to the\u00a0economy.<\/p>\n

While welcoming the decision of the CBN to refrain from further\u00a0tightening of monetary policy at this time, the chamber noted that the\u00a0current context is that\u00a0the economy has been declining. \u201cThe Gross Domestic Product (GDP) has\u00a0contracted for the first time in twelve years; unemployment is on the\u00a0rise; manufacturing capacity utilization has been weakening; and\u00a0investors\u2019 confidence has been at its lowest ebb.\u00a0 The decision not to\u00a0tighten monetary policy is therefore appropriate.<\/p>\n

However, the LCCI explained that while the CBN articulates the\u00a0framework for the new forex regime,\u00a0due consideration should be given to the fact that the economy desires\u00a0a transparent FOREX market which guarantees level playing fields for\u00a0all investors.<\/p>\n

\u201cNeed for clarity on what the CBN describes as a special window for\u00a0critical transactions for which preferential rates will apply. We would\u00a0like to caution against possible abuse and distortions that such a\u00a0window could create. It could pose a risk to the entire system.\u00a0 We\u00a0would like to be assured that the window for the critical transactions\u00a0will be managed transparently and in a manner that it will not create\u00a0distortions in the economy.<\/p>

\r\n
Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

\u201cExport proceeds, capital importation and Diaspora remittances should\u00a0be allowed into the economy through the autonomous window at prevailing\u00a0market rates. And the owners of such funds should have unhindered\u00a0access to their funds.<\/p>\n

\u201cCBN should revisit the list of items that have been placed on\u00a0exclusion list of the FOREX market. Many critical inputs of\u00a0manufacturing companies are on the list and this has crippled the\u00a0operations of such companies creating significant job and output\u00a0losses\u201d, it added.<\/p>\n

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria\u00a0(CBN) had on Tuesday introduced a flexible exchange rate policy\u00a0into the nation\u2019s monetary policy system. This policy allows the\u00a0exchange rate to be determined by forces of supply and demand.<\/p>\n

The CBN Governor, Godwin Emefiele revealed that the MPC decided to\u00a0retain the Monetary Policy Rate (MPR) at 12 per cent, while also\u00a0retaining the Cash Reserve Requirement (CRR) at 22.5 per cent and the\u00a0Liquidity Ratio (LR) at the current rate of 30 per cent.<\/p>\n

The CBN is expected to within the next few days unveil the new\u00a0guideline on the management of foreign exchange in the country.<\/p>\n

Experts are of the view that there is possibility that the Naira would\u00a0experience further decline against the dollar with new directive.<\/p>\n","protected":false},"excerpt":{"rendered":"

Friday Ekeoba The Lagos Chamber of Commerce and Industry, LCCI has said that the\u00a0recent position of the Central Bank of Nigeria (CBN) to adopt a\u00a0flexible exchange rate regime will improve the efficiency of forex\u00a0allocation in the domestic economy. According to LCCI, the CBN\u2019s move will amongst others also cause a\u00a0reduction in the distortions that currently …<\/p>\n","protected":false},"author":11,"featured_media":142,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[23,17],"tags":[36,48],"coauthors":[2392,2393],"class_list":["post-141","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-news","tag-cbn","tag-lagos-chamber-of-commerce-and-industry"],"yoast_head":"\nCBN\u2019s flexibility exchange rate will enhance forex allocation\u2014LCCI - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/cbns-flexibility-exchange-rate-will-enhance-forex-allocation-lcci\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CBN\u2019s flexibility exchange rate will enhance forex allocation\u2014LCCI - National Wire\" \/>\n<meta property=\"og:description\" content=\"Friday Ekeoba The Lagos Chamber of Commerce and Industry, LCCI has said that the\u00a0recent position of the Central Bank of Nigeria (CBN) to adopt a\u00a0flexible exchange rate regime will improve the efficiency of forex\u00a0allocation in the domestic economy. 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