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Akinwande Soji-Ojo
As part of its ongoing foreign exchange (forex) market reforms, the Central Bank of Nigeria (CBN) has discontinued any cap on the spread on interbank forex transactions and restrictions on the sale of interbank proceeds.
A statement issued on Friday by the apex bank’s Director, Financial Markets Depratment, Dr Omolara Duke, said the action was to promote a market-based price discovery system.
She said authorized dealers are to continue conducting their forex transactions on a “Willing Buyer and Willing Seller” basis.
“A key objective of the ongoing foreign exchange market reforms by the Central Bank of Nigeria is to promote a market-based price discovery system. Consequently, the Bank hereby discontinues any cap on the spread on interbank foreign exchange transactions and restrictions on the sale of interbank proceeds.
“Authorized Dealers are to continue to conduct their foreign exchange transactions on a “Willing Buyer and Willing Seller” basis. In addition, they are to strictly adhere to high ethical standards in their dealings in the foreign exchange markets. This includes but not limited to adopting appropriate price disclosures and transparency for transactions,” the statement read.
CBN noted that all executed transactions are to be recorded immediately on the relevant treasury systems and reported to market authorities as stipulated.
