The Nigerian Central Bank has announced operational adjustments to the foreign exchange market.
The Nigerian Foreign Exchange Market will no longer operate with segmentation, according to a statement from the central bank on Wednesday evening which was signed by its Director of Financial Markets, Angela Sere-Ejembi, and distributed to all authorized dealers and members of the public.
The following are the new CBN regulations regarding the foreign exchange market:
“All segments are now collapsed into the Investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
“Re-introduction of the Willing Buyer, Willing Seller” model at the I&E Window. The current window establishment circular, FMD/DIR/CIR/GEN/08/007, dated 21 April 2017, will serve as the operational manual for this window. At this time, foreign exchange is accessible to all qualified transactions.
“The weighted average rate of the previous day’s conducted transactions at the I&E window, calculated to two decimal places, shall be the operational rate for all government-related transactions.
“Prohibition of trading restrictions on oversold foreign exchange positions with authorization to use OTC futures to offset short holdings. Overbought position limits shall be zero.
“The reintroduction of order-based two-way quotes with an N1 bid-ask spread.” A Central Counter Party must clear every transaction.
“Order Book reintroduction to ensure order transparency and seamless trade execution.”
The operational hours of transactions should be from 9am to 4pm Nigeria time, according to the apex bank.
The Naira4Dollar Remittance Scheme and the RT200 Rebate Scheme will cease to exist as of June 30, 2023, according to the CBN.
“In due course, additional instructions on these areas shall be issued. We humbly request that all market participants and members of the public comply by these guidelines,” Sere-Ejembi stated.
