There are strong indications that the Central Bank of Nigeria (CBN) will soon announce a new and robust foreign exchange policy that will address the supply side of foreign exchange and a stable and realistic exchange rate that would engender foreign direct investments (FDIs), Business Day investigations revealed at the weekend.

Following public outcry over capital controls by government that have hindered investments and encouraged capital flight, the Buhari administration is said to have come to the realisation that the market needs consistent and coherent policies which foster a better investment climate as well as price flexibility to reduce shocks that have cost the nation’s capital market huge losses in recent times.

Some analysts told BusinessDay at the weekend that the issue tops the agenda at next week’s Monetary Policy Committee (MPC) meeting and government wants to cash in on the relative acceptability of the deregulation of the downstream sector to announce the policy almost immediately.

Analysts, stakeholders and business leaders have in recent times been in the vanguard of a more robust reform effort, specifically focused on a new FX policy for the country that would make the greenback available for importation of critical inputs that would revive the nation’s ailing industries.

Analysts at Afrinvest, in their weekly update released at the weekend, posited that the deregulation of the petrol price anchored on marketers sourcing of fx at the secondary market could put more pressure on the naira, as attention would be shifted to the parallel market.

“More importantly, policy inflexibility of FX market still constitutes a burden to importers and tacit approval granted to marketers to source FX at secondary markets could pressure exchange rate further at the parallel market. We think that the recent effort should be complimented with an exchange rate liberalisation policy. Hence, we anticipate a major move on FX by the CBN this month,” say the analysts.

But Lai Mohammed, information minster, said recourse to the secondary market was as a result of the unavailability of forex, stressing that a total of $800 million was coming into the coffers of the federal government monthly, out of which $600 million was needed for importation of fuel.

Friday Ameh, energy analyst told BusinessDay at the weekend, that Fx policy reform would be another bold sterop by the government, adding that the “Buhari government might be on the way of regaining its dwindling popularity and rating if the naira is appropriately priced and forex availability is assured.

“This is because the ailing companies would be revived and Nigerians that lost their jobs might regain them.”

Last Wednesday, Vice President Yemi Osinbajo, told a conference in Lagos that the country needed a “substantial review” of its foreign-exchange policies, including further consideration about devaluing the naira.

Africa’s largest economy is growing at its slowest rate since 1999 as oil revenue declines due to a plunge in crude prices and the lowest production in more than 20 years. Nigeria has held the naira at N197-N199 per dollar since March last year, even as oil revenue and export earnings fall and other crude producers from Kazakhstan to Russia let their currencies weaken.

Dollar reserves have fallen 29 percent since mid-2014 to less than $27 bn, the lowest in more than ten years, as the Central Bank’s capital controls slowed foreign investment to a trickle.

http://businessdayonline.com/2016/05/cbn-set-to-announce-fx-policy-reform/ lalasticlala, dominique, Mynd44, Seun

unstable as wind, I believe people working with Buhsri are his problem.. they seems to be alien to Nigeria economy. Today they stand for A tomorrow they stand for z.

After wasting one full year for nothing