Nigeria unveils new forex policy, removes controls on naira

June 15, 2016

Nigeria unveils new forex policy, removes controls on naira

The Central Bank of Nigeria, CBN, on Wednesday formally unveiled the much-awaited flexible foreign exchange policy, saying it would launch a forex interbank trading window that will be purely market-driven.

The new policy effectively removes controls on the naira, and is expected to increase dollar supply and help the nation’s weak economy.

Making the announcement in Abuja on Wednesday, CBN governor, Godwin Emefiele, said the bank will operate a single trading window, to be launched on Monday.

The new window will have about 10 primary traders, to be appointed by the bank. Each trader will have a minimum volume of $10 million, he said.

He said the new mechanism would enable businesses plan their portfolio effectively without fear of losses as a result fluctuation in exchange rates.

“We are optimistic that the steps we have taken today will further deepen the market and help get foreign exchange into the market. I will say to Nigerians be calm, there is no need to worry, everything is well,” Mr. Emefiele said.

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  • Not clear.

  • Further explanation is required

  • I hope this won’t worsen the situation further

  • Expect rapid decline in the value of naira. No matter how much trading is taking place, our appetite for USD means that demand will continue to outpace available supply of USD, given the poor oil based fx income. Naira is in deep trouble.

    I foresee many people who have been clamoring for deregulated exchange ratte to start complaining about the economy in about a years’ time. The only winners are are the people that have taken position against the Naira devaluation who will make tons of money.. example is Bismark Rewane of FSDH.

    • Bismark Rewane is of Financial Derivatives; NOT FSDH. Moreover, he is not a currency speculator.

    • U like blackmail people.What has Rewane got to do with it?

    • Can you prove this? Let us be careful O!


  • It’s actually better as the window for arbitrage is now shut. No more round tripping

    • Says who?

  • Nigerians at home and in diaspora should wait for the impact the CBN governor,s new policy would have on naira rate and fiscal strength.This new policy will definitely positively impact value of naira and will ease the difficulty that business people are facing.Naira devaluation will never serve any good fiscal/economic interest of Nigerians home and abroad.

  • This policy does nothing to solve the problem. which we have limited amount of dollar, yet our demand for it keeps increasing. what this policy does is reduce speculation. However the policy should have being followed with increase investment in reducing our demand for dollars. There is a need to reduce the number of BDC operating in the country, that only work to speculate on naira and help looters.

    • You are wrong. You have limited amount of dollar partly because the exchange rate of the Naira was mostly unpredicable. Foreign Investors knew that Nigeria must devalue but did not know when and how much. So they pulled their funds from Nigeria and new Investors shunned Nigeria for the same reason. Moreover, with the flexible exchange rate Nigeria is now meeting one of the conditions of the IMF and worldbank for loans.

      • Investors are fleeing Nigeria because Buhari’s Boko Haram Economics (also called brain-dead Economics) has no head, no tail, deaf, blind, or better still non-existent. No policy of any kind. A government with no sense of direction.

    • As long as the Cbn is not selling fx to the Bdcs that is an ok first step for starts.

  • This headline is quite misleading. While this is a significant shift from the policies of the last one year, CBN did not actually remove all controls. The CBN Governor clearly stated that “The Forty-One (41) items classified as “Not Valid for Foreign Exchange” as detailed in a previous CBN Circular shall REMAIN INADMISSIBLE in the Nigerian FX market”.

    • Well, not much of a problem since Cbn will allow the naira to float and adjust automatically from june 20.

      • If the adjustment will still exclude some segment of the market, how can the government determine the real price of forex…

        • It is not excluding without an alternative (black market is still there for you), so no issues.

  • We pray the new policy will impact positively on the economy.

  • The is how the APC government fools Nigerian. The headline should have been “The Naira finally devalued”.

    • Devalued to what then? This is more like a correctional float.

      • It is even worse than devaluation. No body knows what the official rate of the Naira is.

        • Initially it may but on the long run it will calm the Fx market.

    • I take it its the APC government that wrote the headline in PREMIUMTIMES

  • So na this one make Grand Pa run go London?

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