In a significant policy shift, the Central Bank of Nigeria (CBN) has announced the removal of the cap on the spread for interbank transactions and lifted restrictions on the sale of interbank proceeds. This decision, implemented on Thursday, reflects a transition towards a more market-driven approach to foreign exchange management within the country.
Duke Omolara Omotunde, Director of the CBN’s Financial Markets Department, conveyed this development in a statement addressed to all authorized dealers. The statement emphasizes, “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 instructed to continue conducting their foreign exchange transactions based on a ‘Willing Buyer and Willing Seller’ framework. Additionally, they are urged to adhere strictly to high ethical standards in their dealings within the foreign exchange markets. This entails embracing appropriate price disclosures and transparency in transactions. The statement further underscores the importance of promptly recording all executed transactions on the relevant treasury systems and reporting them to market authorities as mandated.
