In a significant policy shift, Central Bank of Nigeria (CBN) has announced the removal of the cap on the spread for interbank transactions, opting for a market-driven approach to foreign exchange management.
The move, effective Thursday, also includes the lifting of restrictions on the sale of interbank proceeds.
According to a statement from Duke Omolara Omotunde, Director of the CBN’s Financial Markets Department, all authorized dealers are now encouraged to conduct foreign exchange transactions on a ‘Willing Buyer and Willing Seller’ basis.
The statement reads, “Consequently, the bank hereby discontinues any cap on the spread of 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.
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“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.”