Reducing forex regulations will ease pressure on the parallel market -LCCI

According to the Lagos Chamber of Commerce and Industry (LCCI), the Central Bank of Nigeria (CBN) would lessen demand pressure on the parallel market by lifting foreign exchange (FX) restrictions on 43 previously prohibited commodities.

In addition to praising the move to increase the supply of dollars in response to demand pressure, Dr. Michael Olawale-Cole, President of the LCCI, said as much in a statement provided to Vanguard on Friday.

According to him, the commitment of CBN to offset the FX backlog as part of the measures to address the current FX challenge plaguing the market is noteworthy.

He stated: “This policy change is expected to reduce the demand pressure on the parallel market and ensure there is a gradual convergence in FX market rates.

“LCCI particularly appreciates this stand to promote orderliness and professional conduct by all market participants to ensure market forces determined exchange rates on a willing buyer- willing seller principle.

“Over the years, the chamber has consistently expressed its concerns about the restrictions in the FX market and its consequences on the divergence of the FX rates.

“In our opinion, this policy is a market-friendly step towards unifying the exchange rates and is expected to curtail inflationary pressures in the short term.”

Olawale-cole urged the apex bank to adopt creative financing options for clearing the short to medium-term backlog and establish a mechanism to address forex unification under the current system.

“The chamber believes the authorities must pursue the right monetary policy reforms to improve the investment climate and boost investor confidence. “We call on the CBN to ensure transparency and accountability in banks’ foreign exchange dealings at the investors & exporters windows,” he added.