The Central Bank of Nigeria (CBN), has adopted a single
window corridor for all foreign exchange transaction in the country beginning
from August 1, 2016, reports ITRealms.
A circular to this effect to banks and endorsed by Director,
Financial Market Department (FMD), Dr. Alvan Ikoku, said the CBN’s action will
engender transparency and professionalism in the Nigerian foreign exchange
market.
“The Central Bank of Nigeria hereby directs that all FX
related trades by Authorised Dealers (Banks) and Corporate Institutions in the
Nigerian FX market, with effect from Monday, August 1, 2016 must be executed
through the FMDQ-advised FX trading Auction and Surveillance Systems,” part of
the circular read.
ITRealms also gathered that this was in a bid to stabilize
the naira, CBN had in June adopted a flexible foreign exchange policy.
Ikoku explained that in adopting the new policy, CBN
Governor, Mr. Godwin Emefiele assured that the policy would guarantee improved
access to foreign exchange for businesses.
Emefiele was quoted as saying, “After assessing the various
risk profiles available, the committee resolved to adopt the least risky option
by adopting a flexible foreign exchange policy to restore the automatic
adjustment properties of the exchange rate. It is time to introduce greater
flexibility in the management of FOREX market.”
Further, ITRealms reports that the circular insisted that
deployment of the FMDQ-advised FX systems will only be to those corporates that
have been screened and pre-approved by FMDQ in line with its on-boarding eligibility
criteria.
“Therefore, all Authorised Dealers (i.e banks) are to
execute all FX trades among themselves and with their clients (Corporate
Institutions) through the FMDQ-advised FX systems,” CBN insisted.
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