Africa Press-Nigeria:<\/p>\n
THE IMF has cautioned the CBN against dollar rationing stressing that this will hamper foreign trade and investor confidence and thus slow down the nation\u2019s economic recovery.<\/p>\n
The warning is coming on the heels of 88 percent decline in volume of dollars traded in the Investors & Exporters (I&E) window even as external reserves declined further to $33.44 billion as at April 28, 2020.<\/p>\n
The IMF gave this warning while reviewing the recent developments in the nation\u2019s foreign exchange market against the country\u2019s request for $3.4 billion Rapid Financing Instrument, RFI, facility.<\/p>\n
In its report on Nigeria\u2019s request titled: \u201cRequest for purchase under the Rapid Financing Instrument\u201d, the IMF stated: \u201cWith reserves falling, staff welcomes recent steps taken by the CBN to allow greater flexibility in the Investors & Exporters (I&E) rate and narrow differences between various FX windows. With the spread across the various exchange rate windows now very narrow, this is also a good moment to immediately move to full and formal unification \u2013 e.g., by converging all foreign exchange windows to the I&E window.<\/p>\n
\u201cThis critical step to ensuring a well-functioning market would be helped by the CBN\u2019s calibration of its foreign exchange sales in the market at a level commensurate with protecting central bank reserves while taking into account low international oil prices and reduced FX demand. A unified and more flexible exchange rate will be an important shock absorber, especially in turbulent times \u2013 with CBN FX interventions limited to smoothing large fluctuations in the exchange rate.<\/p>\n
\u201cRationing of foreign exchange \u2013 such as occurred in 2015, with damaging consequences \u2013 must be avoided as it would hamper trade and investor confidence, hence further delaying the economic recovery once the crisis passes.\u201d<\/p>\n
I&E window turnover falls 88 per cent in April<\/p>\n","protected":false},"excerpt":{"rendered":"
Africa Press-Nigeria: THE IMF has cautioned the CBN against dollar rationing stressing that this will hamper foreign trade and investor confidence and thus slow down the nation\u2019s economic recovery. The warning is coming on the heels of 88 percent decline in volume of dollars traded in the Investors & Exporters (I&E) window even as external […]<\/p>\n","protected":false},"author":62,"featured_media":20877,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[503,420],"class_list":["post-24721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-cbn","tag-forex"],"yoast_head":"\n