CBN Increases Foreign-Exchange Curbs to Protect Reserves

The Central Bank of Nigeria (CBN) excluded importers from accessing foreign exchange for some goods in Africa’s biggest economy as it seeks to conserve external reserves and stabilize the naira.
Forty categories of goods including rice, cement, poultry and steel-pipes were banned, according to a statement posted on the Abuja-based Central Bank of Nigeria’s website. Importers bringing in the affected goods “shall do so using their own funds,” the regulator said.
“The implementation of the policy will help conserve foreign reserves as well as facilitate the resuscitation of domestic industries and improve employment generation,” Olakanmi Gbadamosi, director of the central bank’s trade and exchange department, said in the statement.
Governor Godwin Emefiele and other central bank officials voiced concern at a meeting with lenders last week that removing restrictions it imposed in the last three months of 2014 to protect the local currency may trigger a surge in demand for dollars, according to a person at the meeting.
Faced with a plunge in the price of oil, the source of 90 percent of Nigeria’s exports, the regulator started imposing restrictions as it seeks to protect the local unit that has weakened 18 percent against the dollar in the past year.
The nation’s foreign-currency reserves have declined 16 percent to $29 billion this year.
Source: Bloomberg

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