Regulatory Alerts2024-02-09 | FMD/DIR/PUB/CIR/001/012Removal of the spread on Foreign Exchange Transaction
The Central Bank of Nigeria has removed the cap on the spread of interbank foreign exchange transactions to promote a market-based price discovery system. Authorized dealers are to operate on a "Willing Buyer and Willing Seller" basis and maintain high ethical standards, including price transparency. All transactions must be immediately recorded and reported to market authorities.
Central Bank of Nigeria 234 700 -225-5226, +234 800-225-5226 FMD/DIR/PUB/CIR/001/012 February 8, 2024 ALL AUTHORISED DEALERS REMOVAL OF THE SPREAD ON FOREIGN EXCHANGE TRANSACTIONS 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. Please note that all executed transactions are to be recorded immediately on the relevant treasury systems and reported to market authorities as stipulated. Duke, Omolara Omotunde. (Ph.D.) Director, Financial Markets Department