Financial Expert lauds CBN Governor over mandate to banks in sourcing forex from export proceeds market.
Written by News Room on February 17, 2022
A recent comment by the Governor of the Central Bank of Nigeria, Godwin Emefiele, in the financial services sectors with regard to the forex market has raised a positive reaction.
Emefiele had stated that banks must begin to source their forex from the export proceeds market, where they may match their import demands with export proceeds, insisting the decision was in accordance with the CBN’s commitment to increase the country’s foreign reserves through non-oil export profits.
Speaking to Invicta News Correspondent, David Vincent Ejeh, a financial analyst and banker with Access Bank plc, Mr. Femi Otitoju, said the policy could be a move to a more flexible exchange rate system that would affect hot money Foreign Portfolio Investment (FPI) to the Nigerian economy.
He adds that the anticipated move by the Central Bank of Nigeria to suspend the allocation of forex to Deposit Money Banks (DMB), will accelerate a market-driven exchange rate mechanism that can most likely showcase the true value of the naira, thereby attracting foreign portfolio investors, that have in recent years primarily stayed off board due to stringent capital inflows.
For the financial expert the implication of this CBN policy is positively pointing toward a floating exchange because of its effort to encourage non-oil exports that will be transacted through the import and export window. The apex bank’s intention is to allow the price of forex to be determined within the market.