CBN confirms operational changes to foreign exchange market

The Central Bank of Nigeria, CBN, has confirmed operational changes to the foreign exchange market..

In a statement on Wednesday by Angela Sere-Ejembi, Director, Financial Markets, CBN, Peak confirmed the deregulation of the segment and that all segments are now collapsed into the Investor I&E window. Investors and Exporters.

Edujandon.com reports that CBN has directed commercial banks to lift limits on naira for investors and exporters.

Giving a view on the operating fees of the foreign exchange market, the country’s apex bank announced that medical, tuition, BTA/PTA and SME applications will continue to be processed through deposit bank.

It announced the termination of the RT200 Cashback Program and the Naira4Dollar Remittance Program, effective June 30, 2023.

“The Central Bank of Nigeria (CBN) wishes to notify all authorized dealers and the public of the following immediate changes to operations on the Nigerian Foreign Exchange Market (FX): Abolition of the segment. All segments are now collapsed to the Investor and Exporter window (1&E).

“Medical, tuition, BTA/PTA and SME applications will continue to be processed through deposit banks.

“Re-introduce the “Ready Buyer, Ready Seller” model at Window 1&E.

“The activities in this window will be guided by the current circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/O8/007. All eligible trades are allowed forex access at this window.

“The activity rate for all government-related transactions will be the weighted average of transactions executed the previous day at the I&E window, calculated to two (2) digits decimal.

“Regulates trading limits on oversold forex positions with permission to hedge short positions in OTC futures. Limits on overbought positions will be zero.

“Reintroduced two-way quotes based on orders, with a bid-ask spread of A1. All transactions will be cleared by a central counterparty party (CCP).

“The reintroduction of the Order Book to ensure transparency of orders and seamless trade execution. Trading hours will be from 9am to 4pm, Nigeria time.

“The termination of the RT200 Cashback Program and the Naira4Dollar Remittance Program, effective June 30, 2023.

“All market participants and the general public please abide by these rules,” the statement read.

The dramatic change is coming in the wake of President Bola Ahmed Tinubu suspending Godwin Emefiele as governor of CBN last Friday.

Recall that Tinubu, in his presidential inauguration speech, pledged to unify the country’s foreign exchange market and strengthen investors’ confidence.

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