The Central Bank of Nigeria (CBN) on 21 April 2017 announced that it has set up a special foreign exchange window for investors, exporters and end users. The announcement was made via a Circular referenced FMD/DIR/CIR/GEN/08/007.
According to the Circular, the new window which takes effect from 24 April 2017, is tagged the "Investors' & Exporters' Foreign Exchange Window" (the Window) with the objective of boosting liquidity in the FX market and ensuring timely execution and settlement of eligible transactions.
Eligible transactions listed under the Window are categorized into the three classes below:
- Invisible transactions (excluding international airline ticket sales remittances) e.g. loan repayments, capital repatriation, dividend remittance, technology transfer agreements, etc.
- Bills for collection; and
- Any other trade related payment obligations.
The approved participants permitted to trade within this Window are portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange with the Naira. CBN will also participate to ensure professional market conduct.
Trading within this Window can be carried out via telephone to encourage speedy conclusion of transactions until appreciable progress is made with the FX Trading Systems on-boarding process. The applicable exchange rates of transactions would be agreed between authorized dealers and their counterparties. However, CBN reserves the right to intervene as a buyer or seller, as it deems fit. Also, information on transactions between authorized dealers is to be reported to CBN on a daily basis to promote transparency.
A copy of the Circular can be accessed here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.