The Lagos Chamber of Commerce and Industry (LCCI) says the Central Bank of Nigeria (CBN) left fundamental issues unaddressed in the new foreign exchange allocation method.
Mr Muda Yusuf, the Director-General of LCCI, told the News Agency of Nigeria (NAN) on Tuesday in Lagos that the foreign exchange allocation method review was just “a partial step in the right direction”.
NAN recalls that the apex bank on Feb. 20 reviewed the foreign exchange allocation method to ease access to foreign exchange for some international transactions.
According to Yusuf, if administrative allocation of foreign exchange subsists, multiple exchange rates will continue, liquidity challenges in the foreign exchange market will persist and transparency issues in forex allocation will continue unabated.
“This will continue to weaken investors’ confidence as the foreign exchange market still suffers from over regulation.
“This regulatory stance should be relaxed for liquidity to improve, for the pressure on exchange rate to abate and for allocation efficiency to prevail in the foreign exchange market.
“These are the real concerns of key players in the economy. It is critical to remove all impediments to the inflow of foreign exchange into the economy,” Yusuf said.
He, however, said that the policy review could marginally moderate the pressure on foreign exchange at the retail end of the market with its focus on school fees, medical bills and travel allowances.
Yusuf commended the CBN for clearing all backlog of mature obligations that existed at the inception of the flexible foreign exchange rate policy. (NAN)