Forex Curbs: CBN Moves to Ease Importers' Plight

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In a bid to ease the burden of importers that had made commitments to their partners abroad before the June 23, 2015 circular that restricted access to forex for 41 items, the Central Bank of Nigeria (CBN) has stated that Letters of Credit established before the date of the circular can now be paid from the interbank forex market.

The CBN stated this in a circular dated October 23, 2015, signed by its Director, Trade and Exchange Department, Olakanmi Gbadamosi, a copy of which was posted on its website at the weekend.

The circular was titled: “Re: Inclusion of some imported goods and services on the list of items not valid for foreign exchange in the Nigerian foreign exchange markets.”

It was gathered that the central bank’s forex curb had made it difficult for Nigerian businesses to pay their vendors abroad, with huge debt owed to their credit guarantors abroad.
But the CBN in the latest circular stated that “confirmed/unconfirmed Letters of Credit established before the release of the circular on June 23, 2015, in respect of the 41 items excluded from the forex market can now be paid from the interbank foreign exchange market.”

It however stressed that the circular applies only to the Letters of Credit established for the 41 items prior to the date of the circular. It directed banks to render weekly return on the negotiated Letters of Credit to its Director, Trade and Exchange.

“For the avoidance of doubt, no bank or bureau de change is to provide forex for any of the items in respect of the Form ‘M’ established after June 23, 2015,” it added.

The CBN had in June officially stopped the sale of dollars for a list of 41 items as it seeks to reduce pressure on the naira as well as preserve the country’s external reserves. These items included rice, cement, margarine, palm kernel/palm oil products/vegetable oil, meat and processed meat products, vegetable and processed vegetable products, poultry –chicken, eggs, turkey - private airplanes/jet, Indian Incense, tinned fish in sauce - Geisha/Sardines, cold-rolled steel sheet and galvanised steel sheets. In addition, sourcing of forex for the importation of toothpicks, glass and glassware, kitchen utensils, tables, textiles, woven fabrics, clothes, plastic and rubber products, soap and cosmetic, tomatoes/tomato paste, had been banned.