The Central Financial institution of NigeriaCentral Financial institution of Nigeria (CBN) is about to automate international foreign money trades beginning in December, shifting away from a virtually decade-old over-the-counter buying and selling system. This transition goals to boost transparency and get rid of market distortions.
The CBN introduced that the brand new system will “facilitate a market-driven trade fee accessible to the general public” and has launched new tips for contributors within the international trade market.
“This growth is anticipated to cut back speculative actions, get rid of market distortions, and provides the CBN improved oversight,” the financial institution acknowledged in a round dated October 2.
The CBN indicated {that a} two-week check run would happen in November, though particular dates weren’t offered.
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This transition follows the foreign money controls applied in Nigeria in 2017, throughout a major financial disaster, when the CBN launched a number of trade fee regimes, together with an over-the-counter buying and selling system that hid the weaknesses of the naira foreign money.
Underneath the earlier system, lenders may solely commerce purchase or promote orders from clients, which restricted greenback provide and negatively impacted the economic system. With the brand new automated system, the CBN acknowledged that it could publish real-time costs and knowledge on purchase/promote orders.
Knowledge from LSEG indicated that the naira was buying and selling at 1,634 to the greenback as of 12:40 GMT on Friday. The foreign money has reached file lows in each the official and parallel markets because the liberalisation of the foreign money market final yr.
