The Central Bank of Nigeria (CBN) has issued a circular dated February 8, announcing the removal of the ±2.5% cap spread on interbank foreign exchange (FX) transactions.
Additionally, restrictions on the sale of interbank proceeds have been lifted, according to the circular signed by the CBN’s Director of Financial Markets, Omolara Omotunde Duke to all authorised dealers.
The directive reflects the objectives of the CBN’s ongoing FX market reforms, aiming to promote a “market-based price discovery system.”
The circular titled “REMOVAL OF THE SPREAD ON FOREIGN EXCHANGE TRANSACTIONS” reads “A key objective of the ongoing foreign exchange market reforms by the Central Bank of Nigeria 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.”
