ADVERTISEMENT
  • The Membership Club
  • PT Hausa
  • About Us
  • Advert Rates
  • Careers
  • Contact Us
Thursday, January 21, 2021
Premium Times Nigeria
  • Home
  • COVID-19
  • News
    • Headline Stories
    • Top News
    • More News
    • Foreign
  • Investigations
  • Business
    • News Reports
    • Financial Inclusion
    • Analysis and Data
    • Business Specials
    • Opinion
    • Oil/Gas Reports
      • FAAC Reports
      • Revenue
  • Opinion
  • Health
    • News Reports
    • Investigations
    • Data and Infographics
    • Health Specials
    • Features
    • Events
    • Primary Health Tracker
  • Agriculture
    • News Report
    • Research & Innovation
    • Data & Infographics
    • Special Reports/Features
    • Investigations
    • Interviews
    • Markets
  • Arts/Life
    • Arts/Books
    • Kannywood
    • Lifestyle
    • Music
    • Nollywood
    • Travel
  • Sports
    • Football
    • More Sports News
    • Sports Features
  • Projects
    • Parliament Watch
    • Panama Papers
    • Paradise Papers
    • AGAHRIN
  • Home
  • COVID-19
  • News
    • Headline Stories
    • Top News
    • More News
    • Foreign
  • Investigations
  • Business
    • News Reports
    • Financial Inclusion
    • Analysis and Data
    • Business Specials
    • Opinion
    • Oil/Gas Reports
      • FAAC Reports
      • Revenue
  • Opinion
  • Health
    • News Reports
    • Investigations
    • Data and Infographics
    • Health Specials
    • Features
    • Events
    • Primary Health Tracker
  • Agriculture
    • News Report
    • Research & Innovation
    • Data & Infographics
    • Special Reports/Features
    • Investigations
    • Interviews
    • Markets
  • Arts/Life
    • Arts/Books
    • Kannywood
    • Lifestyle
    • Music
    • Nollywood
    • Travel
  • Sports
    • Football
    • More Sports News
    • Sports Features
  • Projects
    • Parliament Watch
    • Panama Papers
    • Paradise Papers
    • AGAHRIN
Premium Times Nigeria
BUA Group Ad BUA Group Ad BUA Group Ad
ADVERTISEMENT
Naira-Dollar

Naira-Dollar

13 things to know about Nigeria’s new forex policy

byPremium Times
June 15, 2016
2 min read

The Central Bank of Nigeria, CBN, on Wednesday formally unveiled the much-awaited flexible foreign exchange policy that would allow the foreign exchange interbank trading window to be driven purely by market forces.

The new policy effectively removes controls on the naira, allowing increased dollar supply that would help strengthen the country’s weak economy.

CBN governor Godwin Emefiele, said in Abuja at the formal announcement that the new framework would operate a single trading window, to be launched on Monday, with about 10 primary traders, to be appointed by the bank.

Each trader will have a minimum volume of $10 million.

Mr. Emefiele said Nigeria’s foreign exchange reserves declined from about $42.8 billion in January 2014 to about $26.7 billion as of June 10, 2016, with average monthly inflows falling from about $3.2 billion to current levels below a billion dollars per month.

Despite these outcomes, the CBN governor said the demand for foreign exchange rose significantly, from an average import bill of N148.3 billion per month in 2005, to about N917.6 billion per month in 2015.

To avoid further depletion of the reserves, Mr. Emefiele said the CBN opted to adopt policy actions to prioritize the most critical needs for foreign exchange as well as maintaining stability in the exchange rate.

The areas of priority included honouring matured letters of credit from commercial banks, importation of raw materials, plants, and equipment, importation of petroleum products, and payments of school fees, and related expenses.

He said the CBN was able to stabilize the exchange rate since February 2015, and eliminated speculators and rent-seekers from the foreign exchange market.

RelatedNews

TB Joshua urges Nigerians to accept COVID-19 vaccine

EPL: Cavani, Pogba shoot Manchester United back to top spot

Herdsmen: Buhari unaware of security situation in Ondo – Akeredolu’s aide

Nigeria looks forward to working with Biden, Harris – Buhari

“Our Reserves, despite having fallen, is still robust and is able to cover about five months of imports as against the international benchmark of three months,” the CBN governor said.

He said it was time to restore the automatic adjustment mechanism of the exchange rate, with the re-introduction of a flexible inter-bank exchange rate market.

The workings of the market, he explained, would be consistent with the CBN’s objectives of enhancing efficiency and facilitating a liquid and transparent foreign exchange market.

Dangote adbanner 728x90_2 (1)

Key highlights of the framework include:

1. The market shall operate as a single market structure through the inter-bank/autonomous window;

2. The Exchange Rate will be purely market-driven using the Thomson-Reuters Order Matching System as well as the Conversational Dealing Book;

3. The CBN will participate in the Market through periodic interventions to either buy or sell FX as the need arises;

4. To improve the dynamics of the market, CBN will introduce FX Primary Dealers (FXPD) who would be registered by the CBN to deal directly with the Bank for large trade sizes on a two-way quotes basis;

5. These Primary Dealers shall operate with other dealers in the Inter-bank market, amongst other obligations that will be stipulated in the Foreign Exchange Primary Dealers (FXPD) Guidelines;

ADVERTISEMENT

6. There shall be no predetermined spread on FX spot transactions executed through the CBN intervention with Primary Dealers, while all FX Spot purchased by Authorized Dealers are transferable in the inter-bank FX Market;

7. The 41 items classified as “Not Valid for Foreign Exchange” as detailed in a previous CBN Circular shall remain inadmissible in the Nigerian FX market;

8. To enhance liquidity in the market, the CBN may also offer long-tenored FX Forwards of 6 to 12 months or any tenor to Authorized Dealers;

9. Sale of FX Forwards by Authorized Dealers to end-users must be trade-backed, with no predetermined spreads;

10. The CBN shall introduce non-deliverable over-the-counter (OTC) Naira-settled Futures, with daily rates on the CBN-approved FMDQ Trading and Reporting System.

11. The OTC FX Futures shall be in non-standardized amounts and different fixed tenors, which may be sold on any dates thereby ensuring bespoke maturity dates;

12. Proceeds of Foreign Investment Inflows and International Money Transfers shall be purchased by Authorized Dealers at the Daily Inter-Bank Rate; and

13. Non-oil exporters are now allowed unfettered access to their FX proceeds.

  • WhatsApp
  • Tweet
  • Email
  • Print
  • Telegram
  • More
  • Share on Tumblr
  • Pocket

Support PREMIUM TIMES' journalism of integrity and credibility

Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.

Donate


TEXT AD: To advertise here . Call Willie +2347088095401...


JOIN THE CONVERSATION

  • Disqus (28)
premiumtimes



PT Mag Campaign AD

Previous Post

Edo govt denies owing Amodu Shuaibu N25 million

Next Post

Nigeria troops ‘recover key Boko Haram communication gadget’

Premium Times

Premium Times

More News

Joe Biden [PHOTO: @JoeBiden]

Biden reverses Trump’s travel ban on Nigeria, Yemen, Eritrea, others

January 21, 2021
Nigerian Economy

Despite COVID, Nigeria’s quarterly FDI reached two-year high in 2020

January 21, 2021
A family is being tested for COVID-19 in Nigeria [PHOTO: TW: @NCDCgov]

COVID-19: Nigeria records 1,386 new cases, 14 deaths

January 21, 2021
A wheat farm used to illustrate story [PHOTO CREDIT: Business Standard]

EXCLUSIVE: Nigeria’s decade-long wheat production so woeful 98% is imported

January 21, 2021
Osun_State_map

EXCLUSIVE: Osun commissioner, Oyetola’s aide test positive for COVID-19

January 20, 2021
Rivers state Governor Nyesom Wike [PHOTO CREDIT: @GovWike]

Wike, unwilling to pay Rivers pensioners, pledges N500 million to Sokoto

January 20, 2021
Next Post
Nigerian Army

Nigeria troops ‘recover key Boko Haram communication gadget’

​Police ​Commission approves promotion of 986 senior officers

Nigeria Police launch forensic lab in Abuja

Discussion about this post

Search

#EndSARS: Latest Updates




Polaris Bank


JAIZ Ad


NITDA Ad




Advertisement






netherland biz school Advert

Zenith Advert

Heritage Advert
ADVERTISEMENT

Our Digital Network

  • PT Hausa
  • Election Centre
  • Human Trafficking Investigation
  • Centre for Investigative Journalism
  • National Conference
  • Press Attack Tracker
  • PT Academy
  • Dubawa
  • LeaksNG
  • Campus Reporter

Resources

  • Oil & Gas Facts
  • List of Universities in Nigeria
  • LIST: Federal Unity Colleges in Nigeria
  • NYSC Orientation Camps Address Nationwide
  • Nigeria’s Federal/States’ Budgets since 2005
  • Malabu Scandal Thread
  • World Cup 2018
  • Panama Papers Game
  • Our Digital Network
  • About Us
  • Resources
  • Projects
  • Data & Infographics
  • DONATE

All content is Copyrighted © 2020 The Premium Times, Nigeria

No Result
View All Result
  • Home
  • COVID-19
  • News
    • Headline Stories
    • Top News
    • More News
    • Foreign
  • Investigations
  • Business
    • News Reports
    • Financial Inclusion
    • Analysis and Data
    • Business Specials
    • Opinion
    • Oil/Gas Reports
      • FAAC Reports
      • Revenue
  • Health
    • News Reports
    • Investigations
    • Data and Infographics
    • Health Specials
    • Features
    • Events
    • Primary Health Tracker
  • Agriculture
    • News Report
    • Research & Innovation
    • Data & Infographics
    • Special Reports/Features
    • Investigations
    • Interviews
    • Markets
  • Arts/Life
    • Arts/Books
    • Kannywood
    • Lifestyle
    • Music
    • Nollywood
    • Travel
  • Sports
    • Football
    • More Sports News
    • Sports Features
  • Projects
    • Panama Papers
    • Paradise Papers
    • Parliament Watch
    • AGAHRIN
  • Opinion
  • PT Hausa
  • The Membership Club
  • Dubawa
    • Dubawa NG
  • About Us
  • Advert Rates
  • Careers
  • Contact Us
  • Digital Store
  • DONATE

All content is Copyrighted © 2020 The Premium Times, Nigeria

Our website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.