The Central bank of Nigeria (CBN) has announced the unification of all exchange rate windows. Henceforth all foreign exchange transactions will be done through the Investors & Exporters (I&E) window.
In the circular titled “Operational Changes to the Foreign Exchange Market” signed by Angela Sere-Ejembi, Director, Financial markets, the CBN directed that these changes are effective immediately.
This means that all applications for medicals, school fees, BTA/PTA and SMEs would continue to be processed through the banks via the I&E window. Even all government transactions shall also included. Previously, the FX market was divided into different windows.
This circular also included the re-introduction of the “Willing Buyer, Willing Seller” model at the I&E window. This means that henceforth all eligible transactions can access foreign exchange at their preferred rates.
Other changes highlighted in the circular are as follows:
“The operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two (2) decimal places.”
“Proscription of trading limits on oversold FX positions with permission to hedge short positions with OTC futures. Limits on overbought positions shall be zero.”
“Re-introduction of order-based two-way quotes, with bid-ask spread of N1. All transactions shall be cleared by a Central Counter Party (CCP).
“Reintroduction of Order Book to ensure transparency of orders and seamless execution of trades.
“The operational hours of trades shall be from 9am to 4pm, Nigeria time.”
“Cessation of RT200 Rebate Scheme and the Naira4Dollar remittance Scheme, with effect from 30 June 2023.
This circular confirms the statement by Wale Edun, a member of the President Bola Ahmed Tinubu’s advisory board, to Bloomberg after the country’s dollar debt surged following the surprise weekend suspension of the Central Bank of Nigeria (CBN) governor, Godwin Emefiele. He had said that the unification of exchange rates in Nigeria was “imminent.”
