Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In Proshare - RSS Feed

Further Liberalization of the Inter-Bank Foreign Exchange (FX) Market

Forex
1070 VIEWS
Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In
Proshare

Tuesday, June 6, 2017 3:25 PM /CBN

The Central Bank of Nigeria (CBN), in its efforts to further develop the Nigerian FX market, continues to embark on initiatives that serve to improve the FX market structure.


Consequently, further to the CBN Circular referenced FMD/DIR/CIR/GEN/08/007 dated April 21, 2017 on the Establishment of the Investors’ & Exporters’ (I&E) FX Window, the CBN hereby issues the following directives:


Inter-Bank Trading

a.     
Authorized Dealers may defease their excess foreign currency trading positions to other Authorised Dealers without seeking prior approval from the CBN.

b.     
All inter-bank transactions shall be subject to a maximum spread of N1.00.

c.      
Funds purchased by an Authorised Dealer from another Authorised Dealer, in the inter-bank market, shall not be held in position overnight by the buying Authoirsed Dealer or sold to another Authorised Dealer.

d.     
Such Inter-bank purchases shall only be sold by the buying Authorised Dealer to its customers for Permitted/Eligible Transactions as outlined in the above-referenced Circular. All documentation requirements for Permitted Transactions shall apply.

e.     
Authorised Dealers shall not exceed their respective Foreign Currency Trading Position Limit (FCTPL) without the approval of the CBN. Compliance with the FCTPL shall be strictly monitored by the CBN.

f.       
All inter-bank trades – spot, forwards, futures, options and swaps – that have an impact on an Authorised Dealer’s FCTPL are expected to comply with rate reasonability standards.

g.     
The CBN reserves the right to intervene, as a buyer or seller, as it deems fit in the inter-bank market.

h.    
Authorized Dealers must report to the CBN, details (source and applications indicating the amount, counterparty, deal rate, etc.) of all inter-bank purchases/sales by 4 p.m. daily through the portal provided (fxreturns@cbn.gov.ng). Compliance is mandatory.

On-Boarding of FMDQ Trading System

Authorized Dealers are again advised to encourage their corporate clients to on-board the FMDQ-advised FX Trading System immediately, to avoid sanctions, foster the speedy migration of the activities of the I & E FX Window unto the FX Trading System and, in turn, ensure that the objective of deepening the market is achieved.





Related News
 

1.       CBN Injects $190m into FX Market; Wholesale Segment Gets $100m as SMEs Receive $50m Boost

2.      Ahead of New Week, CBN Set To Meet Needs of Forex Market

3.      CBN Lifts Naira With $482.6m; Retail SMIS Receives $286m as Wholesale Segment Gets $100m

4.      New Code of Conduct to Clean up Foreign Exchange Market's Dirty Reputation is Released

5.      Naira In Upswing...As CBN Targets Convergence

6.      Forex Market Analysis: EUR And USD Bullish Sentiment Persist

7.      CBN Lists 36 Items Valid For FX in the Nigerian Foreign Exchange Markets

8.     U.S. Political Issues Trigger Further Dollar Decline

9.      FOREX: CBN approves $100m for sale at SMIS

10.  Market Structural Change Will Sustain Naira Strength

11.   CBN pumps $81.2m for BTA, PTA, Tuition fees, SMEs segments

12.  Naira to Appreciate Ahead of Heavy Injection of FX by CBN as FX availability excites manufacturers

13.  Forex Market Analysis: GBP and AUD Approaches Resistance Level. UK Rate and Inflation Report in Focu

14.  Dealers Fail To Subscribe Fully to CBN $100m Offer

15.   Forex Market Analysis: USD and JPY Consolidates around 111.84 Support Level, ahead of FED Meeting

16.  Forex: CBN bars erring banks from SME Wholesale Forex window effect May 2, 2017

READ MORE:
Related News