Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Economy Macro-Economic News Circulars

The CBN Just Threw The Kitchen Sink At Shady Forex Traders With This New Circular

Nairametrics by Nairametrics
December 18, 2014
in Circulars, Currencies, Politics
Share on FacebookShare on TwitterShare on Linkedin

The Central Bank Governor yesterday in a surprise move issued a circular instructing banks to keep a net zero position for foreign exchange. Here is an excerpt of the circular.

The Central Bank of Nigeria has observed the recent developments in the Foreign Exchange Market and Its consequences on the stability of the exchange rates.

In order to preserve the stability of the market, the Foreign Exchange Trading Position of Individual Authorized Dealer which is currently at 1% of its Shareholder’s Funds (SHF)unimpaired b losses has been temporarily reviewed downwards to zero percent with immediate effect.

Consequently, Authorized Dealers are therefore required to maintain Zero Percent of their shareholder’s funds as Foreign Exchange Trading Position at the close of each business day.

What does this mean?

The CBN has basically  told banks and BDC’s  in clear terms that they must have a zero balance by selling all forex available for sale by close of business. That way, traders are discouraged from hoarding dollars, which creates artificial demand, and sell whatever forex they have.  For example, you go to a bank to buy forex via BDC and the bank tells you they do not have even though they might have. This new rule expects such infractions to stop. The hope is that it will strengthen the naira against the dollar as the gap between demand and supply will be slimmer.

RelatedPosts

EFCC battles black market to boost naira, local currency gains N60 to $1 within a week

Naira falls to N700/$1 at black market

Will this work?

Well, the CBN has pretty much used most of the tools at its disposal to curb the manipulation of our currency by a few shady dealers. This is perhaps one of the harshest and is expected to force dealers to sell forex. I guess if this doesn’t work, then they might have no choice but to allow the naira float freely at some point or jack up interest rates again.

News continues after this ad


The Naira closed at a record low of N187 at the interbank Wednesday as the news of this circular filtered in.

Related

Tags: Black MarketCapital controlsCBN Forex PolicyNaira DevaluationNews Review

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

inq
avatrade
Stanbic bank
Mega Millions
UBN
Hot forex
Access Bank
Bankers Committee
First bank






    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Meet the leading female tech founders who made Cloud 100 list
    • Berger Paint Nigeria Plc, continues to deliver impressive growth under Abi Allison Ayida’s leadership
    • MTN, others drag SWOOTs capitalization down by N509 billion

    Follow us on social media:

    Recent News

    Meet the leading female tech founders who made Cloud 100 list

    Meet the leading female tech founders who made Cloud 100 list

    August 14, 2022
    Berger Paint Nigeria Plc, continues to deliver impressive growth under Abi Allison Ayida’s leadership

    Berger Paint Nigeria Plc, continues to deliver impressive growth under Abi Allison Ayida’s leadership

    August 14, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com