As the currency situation in the country continues to generate concerns to both domestic and foreign parties, expectations are high among stakeholders and users of foreign exchange on the likely positive decision at the Monetary Policy Committee (MPC) meeting which begins tomorrow.

The MPC will be sitting for its 4th session this year between Thursday and Friday to review developments in the global and domestic economic environment since its last meeting May 18 and 19, 2015. The meeting is coming against the backdrop of incessant pressure on FX rate, creeping inflation, slowing GDP growth and global economic fragility amid heightened expectation of a US Fed rate hike and the debt crisis in the Eurozone.

“We expect that the CBN will maintain policy rates at the next MPC meeting, although increase in the intervention rate in the Interbank market may not be unlikely”, Ayodeji Ebo, head investment research, and his team of analysts said.

The analysts said the MPC would need to deliberate on alternative methods of stabilizing FX and restoring confidence in the capital market without leading to a run on the external reserves.

Several foreign exchange policies have left investors especially foreign ones with uncertainties about investing in the country. The most recent of which was the contentious removal of 41 products from items valid for foreign exchnage funding at all segments of the FX market. This has resulted in the widening of the exchange rate spread between the official and parallel markets which is now 24.4 percent or N48.05/US$1.00, creating a fertile ground for round-tripping, currency arbitraging and speculation, Ebo said.

Meanwhile, the business community including manufacturers and other stakeholders had asked the Central Bank of Nigeria (CBN) to review the policy in relation to mitigating advance consequence for employment, inflation and output. George Onafawokan, managing director/ CEO of Coleman Wire and Cables limited, who lost N800 million to forex policy asked the CBN to give proper definition of items restricted for forex access.

“Ambiguous definition of macroeconomic policies is prone to disaster. You are trying to create jobs but you are losing jobs”, Onafawokan said at a dialogue with CBN on foreign exchange policy organized by Lagos Chamber of Commerce and Industry in Lagos..

Goddie Isibor, managing director, Nosak Group, said the policy seeks to remove raw materials for industries that are listed, asking the industries to close.

“The CBN should go back and remove raw materials so that we don’t kill industries with the hope that we are going to increase production”, he said.

Responding, Moses Tule, director monetary policy, CBN, said the CBN will do anything within its power to ensure that macroeconomic policies are sound and cannot be impeached for lack of content.

He explained that the 41 items which are finished products are not banned but were restricted access to foreign exchange because the CBN does not have sufficient forex to meet those needs.

Furthermore, he explained that the CBN does not have the power to impose ban on importation of goods because Nigeria is a member of World Trade Organisation.

In his response to distinguishing between finished products and raw materials, he said, the policy will be revisited and looked at, to examine the features of the items.

“On the definition of the items, I take that as a takeaway, to look at what we can do in that regard”, he said.