CBN May Review Policy on Forex Limits after Exploratory Consultations

Central Bank of Nigeria (CBN) yesterday met with chief executives and treasurers of commercial banks as well as foreign exchange dealers to hear their complaints bordering on some of its recent policies particularly the restriction on foreign exchange dealings.

The meeting, which was described as "exploratory" in nature, to listen to complaints by forex dealers , had the CBN Governor, Mr. Godwin Emefiele in attendance.

THISDAY gathered from a reliable source which attended the consultation that despite several hours of discussions, no definite decisions was reached at the end, prompting a further meeting on Monday for continuation of deliberations on the constraints which had allegedly trailed some of the new monetary policy decisions by the apex bank.

It was further gathered that foreign exchange dealers, including the banks had complained bitterly about the recent introduction of the Order-Based Two-Way Quote (OB2WQ) for forex which demands that quotation for foreign exchange should be backed by evidence of need as against the previous Open-Ended policy which had no restrictions.

According to the source who spoke under condition of anonymity, the forex dealers also complained about the current retention of the band around the monetary policy rate which currently stood at +/-2 per cent, arguing that it is not wide enough to allow for market discovery-where quantity demand would meet supply to determine price.

It was learnt that after listening to all submissions from various stakeholders, the CBN was unable to reach a decision but extended the consultation till Monday for a possible resolution.

The CBN recently terminated its bi-weekly auction of forex at the interbank market and introduced the Order-Based Two-Way Quote to among other things curb speculative attacks and pressure on the naira.