CBN provides easy access to forex for SMEs, restores calm in FX market

By Odunewu Segun

The Central Bank of Nigeria has introduced ‘Form X’, aimed at easing access to forex for small businesses in Nigeria, especially for small and medium enterprises (SMEs).

In the past, those filing request for foreign exchange for invisibles used ‘form A’, while manufacturers, airlines, and those in need of forex in large quantity used ‘form M’.

“As part of its determination to increase foreign exchange liquidity and improve access by small and medium enterprises (SMEs) and retail businesses, the Central Bank of Nigeria (CBN) has introduced the use of FORM X for the SMEs that requires just basic documentation,” CBN said in a statement.

Isaac Okorafor, the bank’s spokesman said “the innovative measure is intended to ease documentation challenges usually encountered by this category of businesses”.

He explained that the new form which must be completed by all SME applicants requires the applicant to fill the form with a supporting application letter as well as beneficiary invoice and bank wire transfer.

The objective of the new guideline, he added, is to remove obstacles usually encountered by those whose forex needs for either visibles or invisibles were as small as or less than $10,000.

He reiterated the apex bank’s determination to continue to ensure adequate supply of forex for genuine transactions in the coming days.

ALSO SEE: Naira expected to rise on CBN FX supply to BDCs

Meanwhile, efforts of the CBN at ensuring stability in the foreign exchange market may have started yielding results as the market is now awash with liquidity surfeit.

Indications of excessive liquidity in the market emerged last week when operators could only pick a little over $39 million out of the $100 million offered for bid by the apex bank.

According to market analysts, with this development, the Naira is set to firm up against major currencies like the Dollar and pound sterling during the week.

It will be recalled that the Central Bank of Nigeria last week opened a special window for to enable Small and Medium Enterprises (SMEs) to access forex for the importation of eligible finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.

That was in addition to the special intervention in the Bureau De Change (BDC) segment of the foreign exchange market which resulted in each operator accessing $20,000 as against the earlier stipulated $10,000 per week.