There were contrary trends in the financial market yesterday, just a day after a major policy change by the Central Bank of Nigeria, CBN, reinstated the 43 items it had excluded from its foreign exchange supply window.
Commenting on the stock market development, analysts at CardinalStone Finance, a Lagos based investment banking firm, stated: “ We opine that the positive market sentiment may not be unconnected to the CBN lifting restrictions on the 43 earlier FX-restricted items and reiterating its commitment to improving FX liquidity.
“All in, we believe that the efficacy of the new policy is likely to be subject to the extent of improvement in FX supply at the I&E window. This view considers the anticipated increase in FX demand at this window following the lifting of the ban”. In a statement made available to Vanguard, Yusuf said that the ban had contributed to the distortions in the forex market.Nigeria’s rig count rises 61% to 29 as investors respond to PIA, others — NUPRCHis words: “We welcome the decision of the CBN to discontinue the forex exclusion policy on the 43 items. It is a move in the right direction. It is part of the policy normalisation process. “The exclusion of the 43 items was one of the several drivers of distortions in the forex market.
“The CBN reiterates that the prevailing Foreign Exchange rates should be referenced from platforms such as the CBN website, FMDQ, and other recognised or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.