By Akinsuroju Olubunmi
CBN adjusts price deviation limit for Import-Export.
The Central Bank of Nigeria (CBN) has revised the allowable threshold for price deviations in imports and exports, setting it at +15% and -15% of the global average prices, respectively.
Dr. Hassan Mahmud, Director of the Trade and Exchange Department, issued a circular to all authorized dealer banks on Thursday, announcing the adjustment.
Price deviation, a measure of price volatility in the market, is subject to government-imposed trade restrictions known as allowable limits, which dictate the quantity or monetary value of goods a country can import or export within a specific period.
Citing global inflation and related challenges, the CBN explained the rationale behind the review.
The International Monetary Fund (IMF) forecasts a decline in global headline inflation to 5.8% in 2024 and 4.4% in 2025.
According to the circular, the Price Verification System (PVS) aims to combat over-invoicing of imports and under-invoicing of exports. Previously, declared prices exceeding 2.5% above the global average prices triggered queries.
Now, with the adjusted limits, deviations of up to 15% for imports and exports are permissible. Authorized dealer banks and the public are urged to adhere to the new guidelines.
It’s essential to note that the PVS does not determine tariff or duty rates set by the government but serves to prevent excessive outflows of foreign exchange resulting from over-invoicing and other price manipulation practices.
CBN, Price Deviation