By Becky Usman
………CBN Reaffirms Pledge to Enhance Forex Market Liquidity
In a recent development, the Central Bank of Nigeria (CBN) has disclosed its commitment to fostering a well-structured and professionally conducted Nigerian Foreign Exchange Market. The objective is to allow exchange rates to be determined by market dynamics based on the Willing Buyer-Willing Seller principle.
Furthermore, the CBN emphasizes the importance of referencing prevailing Foreign Exchange (FX) rates from authoritative platforms, including the CBN website, FMDCQ, and other officially recognized or designated trading systems. This initiative aims to bolster price discovery, transparency, and the credibility of FX rates.
As part of its mandate to ensure price stability, the CBN will infuse liquidity into the Nigerian Foreign Exchange Market through periodic interventions. These interventions are expected to diminish gradually as market liquidity improves.
A notable update is that importers of all 43 items that were previously restricted by the 2015 Circular (referenced as TED/FEMFPC/GEN/O1/010 and its addendums) are now permitted to acquire foreign exchange in the Nigerian Foreign Exchange Market.
The CBN has affirmed its commitment to expediting efforts to clear the existing FX backlog with current market participants and will maintain an ongoing dialogue with stakeholders to address this matter. As part of its agenda, the CBN is actively consulting with market participants to work toward the realization of a unified FX market.
All market participants and the general public are urged to follow the guidance provided above.