CBN Releases New Forex Market Guidelines

dollar to naira

Governor of the Central Bank, Godwin Emefiele released the guideline in a press conference on Wednesday.

Summary of the Press Conference held by the Governor of the Central Bank on the Flexible Exchange Rate Policy held June 15, 2016

  • The Market will operate as single market through the interbank
  • The FX Rate will be purely market-driven
  • CBN will participate through periodic interventions
  • FX primary dealers will be registered to deal directly with the CBN for large deal sizes.
  • FX primary dealers will deal with other authorized dealers
  • There will be no more spread restrictions
  • The 41 items classified for not valid for FX are still not admissible in FX interbank market
  • CBN may offer long-tenured FX forwards
  • Selling of FX forwards must be trade backed with no pre-determined spread
  • Over the Counter FX futures will be introduced. The OTC FX futures are bespoke and volumes could be non-standard
  • Non-oil exporters are now allowed unfettered access to export proceeds via the interbank market

Timelines

  • Guidelines of the general FX market will be released immediately
  • Guidelines for FX primary dealers will be released immediately
  • FX primary dealers will be appointed and notified by June 17, 2016
  • Interbank FX trading under the new guidelines will begin on June 20, 2016

Source: http://abusidiqu.com/cbn-releases-new-forex-market-guidelines/