The Lagos Chamber of Commerce and Industry has called for an end to the multiple windows in the foreign exchange market, noting that they hurt the economy.
The Director-General, LCCI, Mr. Muda Yusuf, made the call in a statement made available.
“We seek the cessation of the multiple windows in the forex market; multiplicity of windows hurts the economy. The Central Bank of Nigeria could intervene from time to time to modulate the rates in a manner consistent with its capacity,” he stated.
While commending the CBN for the recent investor and exporters’ forex window, Yusuf expressed confidence that it would reduce sharp practices in the market.
He noted that the significance of the new policy lay in the widening of the scope of the market in foreign exchange transactions.
“It is an important step towards the restoration of normalcy to the foreign exchange market as it signposts the easing of restrictions in the market,” Yusuf added.
In addition to boosting the confidence of domestic and foreign investors due to the moderating effect it would have on Nigeria’s country risk, the LCCI DG maintained that the policy would impact positively on liquidity and inflows from autonomous sources in the forex market.
He stated that it would also increase transparency in non-oil export transactions, reduce pressure on foreign reserves as autonomous inflows increase, and boost stock market performance.
Other positive impact of the policy, according to him, include investment growth, reduction of transparency problems and sharp practices that currently exist in the foreign exchange market, reduction in the gap between the official exchange rate and the parallel market exchange rate, along with the phenomenon of round-tripping, and the movement of the exchange rate closer to equilibrium.
The LCCI DG called for bolder steps by the CBN to fully liberalise the forex market.
He stated, “The current CBN policy on the 41 items needs to be reviewed. Investors need to be assured of the commitment of the CBN to a market-based exchange rate policy as enunciated in the Economy Recovery and Growth Plan of the Federal Government.
“We commend the CBN and the National Economic Management Team for this move towards a market-based forex policy regime, which is more efficient, transparent and sustainable.”