CENTRAL BANK OF NIGERIA CHANGES GEAR ON FX MARKET

The Central Bank of Nigeria (CBN) in an attempt to close the wide gap between official inter bank foreign exchange market and the parallel, today announced new strategies for forex allocation and sale in Nigeria.

 According to press signed by its Acting Director, Corporate Communications, Mr Isaac Okorafor, for starters the CBN will immediately provide funds to individual banks to meet customers demand for foreign exchange to pay school fees, medical bills and have basic and personal travel allowance promptly.

These demands are to be met by the banks at rates not more than 20% above inter bank rate.

According to the CBN, the new measure is coming in the heels of successful clearing of backlog 0f basic travel allowance.

This new direct funding, it said, shall be sustained till further notice.

In addition, also to help inter bank market liquidity, the CBN has reduced tenor of its forward sales from maximum of 180 days to no more than 60days.

Banks have also been asked to open foreign exchange outlets at major airports as soon as possible.

Meanwhile, the bank will also begin implementation of its articulated programme to clear all unfilled orders in the inter bank market; stop dictating allocation of forex to banks; and come up with effective intervention programme to support liquidity of the official market.

Finally, FMDQ will also be advised to activate its FX order book system as soon as possible and accelerate on boarding of FX clients on FX relationship system to encourage transperency.

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