CBN injects $190m, unveils fresh rules to liberalise forex market

The Central Bank of Nigeria (CBN) on Monday further liberalised the foreign exchange market by unveiling fresh regulations for a more open market.

According to a circular signed by Alvan Ikoku, director, financial markets department, the CBN now allows authorized dealers to sell their excess foreign currency trading positions to other authorized dealers without seeking prior approval from the CBN.

The bank allows a maximum spread of N1 on such transactions, effective immediately.

CBN on Monday, June 5, 2017, also injected another sum of $190 million into the inter-bank market.

At Monday’s trading, the bank offered the sum of $100,000,000 as wholesale interventions and allocated the sum of $50,000,000 to the Small and Medium Enterprises (SMEs) forex window.

Customers requiring forex for Business/Personal Travel Allowances, tuition and medical fees, among others, got $40 million.

Confirming the figures, Isaac Okorafor, the acting director, corporate communications at the CBN, said the bank was pleased at the performance of the naira, which had made tremendous gain against the dollar in recent times.

According to him, the forex rates at both the inter-bank and BDC segments, had almost converged, prompting even greater optimism that the value of the naira will continue to spike.

Okorafor observed that by ensuring transparency in the market as well as fairness to end-users, the CBN had further exposed speculators and checkmated them.

He therefore urged all dealers, particularly licensed BDCs, to continue to play by the rule, adding that the CBN would not hesitate to wield the big stick against any erring bank or dealer.

The naira continued to maintain its strong stand against major currencies around the globe, exchanging for $364/$1 in the BDC segment of the market on Monday, June 5, 2017.