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CBN restates commitment to boost forex market liquidity

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Nigeria’s apex bank, the Central Bank of Nigeria (CBN), has reiterated its commitment to boost liquidity in the Foreign Exchange (FOREX) Market.

This was announced in a circular signed by Isa AbdulMumin, Director, Corporate Communications of the CBN on Thursday.

According to the CBN, market forces should determine “exchange rates on a willing buyer – willing seller” basis.

The financial body advocates for FX rates to be “referenced from platforms such as the CBN websites, FMDQ, and other recognized or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.”

The circular from the CBN reads “The Central Bank of Nigeria (CBN) will continue to promote orderliness and professional conduct by all participants in the Nigerian Foreign Exchange Market to ensure market forces determine exchange rates on a willing buyer – willing seller principle.

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“The CBN reiterates that the prevailing Foreign Exchange (FOREX) rates should be referenced from platforms such as the CBN websites, FMDQ, and other recognized or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.

“As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time. As market liquidity improves, these CBN interventions will gradually decrease.

“Imports of all the 43 items previously restricted by the 2015 Circular referenced TED/FEM/FPC/GEN/01/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.

“The CBN is committed to accelerating efforts to clear the FX backlog with existing participants and will continue dialogue with stakeholders to address the issue.

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“The CBN has set as one of its goals the attainment of a single FOREX market. Consultation is ongoing with market participants to achieve this goal.”

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