Nigeria removed foreign currency exchange restrictions on 43 imported products and created opportunities for Vietnamese goods. Photo: VNA

The Vietnam Trade Office in Nigeria said that on October 12, the Central Bank of Nigeria announced the removal of the foreign exchange restriction policy for 43 items imported into Nigeria.

"This move will help Nigerian importers diversify their foreign currency supply to serve payment needs in international transactions, thereby promoting import activities of goods from countries around the world, including Vietnam," according to the Central Bank of Nigeria.

According to the Central Bank of Nigeria, the country's domestic manufacturing industry will achieve positive impacts, as input materials have lower costs and consumers benefit from cheaper retail products.

This policy is consistent with a unified foreign exchange market and will have a positive effect on inflation.

Previously, on June 23, 2015, the Central Bank of Nigeria issued a policy to restrict foreign exchange, including a list of 41 items that are not eligible for foreign exchange in the Nigerian market.

In the following years, two more products were added to this list, bringing the total number of illegal items for foreign exchange in the Nigerian foreign exchange market to 43.

According to the provisions of Circular TED/FEM/FPC/GN/01/010, Nigerian businesses are restricted from exchanging foreign currency through official financial/credit channels (licensed commercial banks and credit institutions) to import the 43 items mentioned above.

Therefore, to have a source of foreign exchange for imports, importers had to look to the parallel market. This causes the demand for foreign exchange on the parallel market to increase thereby weakening the exchange rate in the market and pushing prices up. Foreign exchange restrictions also have negative impacts on inflation, causing commodity prices to increase.

With the removal of the above regulation, the Central Bank of Nigeria wishes to promote order and professional conduct of all participants in the Nigerian foreign exchange market, ensuring the exchange rate is determined by market factors and according to the principle of mutual buying and selling between buyers and sellers.

Besides, the goal of this policy is a unified foreign exchange market with flexible and transparent prices, ensuring price stability and increasing liquidity in the foreign exchange market. When liquidity improves, market uncertainties will be reduced.

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