The elimination of segmentation and the reintroduction of the “Willing Buyer, Willing Seller” model at the I&E Window, among other modifications, were confirmed by the Central Bank of Nigeria (CBN) on Wednesday night.
The CBN’s Director of Financial Markets, Angela Sere-Ejembi, signed a statement announcing the adjustments and assuring that more information will be provided on the subject in due time. The statement was made available to journalists in Abuja.
The following immediate changes to how the Nigerian Foreign Exchange (FX) Market operates are being made, the Central Bank of Nigeria (CBN) wishes to alert all authorized dealers and the general public of:
“Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
“Re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window.
“The operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the |&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 41. 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.
“Further guidance on these matters shall be communicated in due course. All market participants and the general public are kindly enjoined to abide by these rules” reads the statement in parts.
