In a recent market notice, the Central Bank of Nigeria (CBN) has announced a significant change in the terminology used within the Nigerian Foreign Exchange (FX) market.
All references to the Investors’ and Exporters’ (I&E) FX Window will now be replaced with the Nigerian Autonomous Foreign Exchange Market (NAFEM).
This change comes in alignment with the CBN’s press release titled “Operational Changes to the Foreign Exchange Market” issued on June 14, 2023.
The key motivation behind this revision is to abolish segmentation within the FX market and bring about greater consistency in terminology.
Additionally, this change aims to align the nomenclature of the formal FX markets with the provisions of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, which specifically references the Nigerian FX Market as the Autonomous Foreign Exchange Market.
What this means: The transition from the I&E FX Window to NAFEM signifies a significant shift in the Nigerian FX landscape.
- FMDQ Securities Exchange Limited (FMDQ Exchange), a major player in the Nigerian financial market, has taken the initiative to update and harmonize all existing references to the I&E FX Window across applicable systems and market documentation.
- This change will also extend to future reports and communications related to the Nigerian FX market.
- This development is set to have a notable impact on how stakeholders in the FX market perceive and interact with this crucial segment of Nigeria’s financial ecosystem.
- This suggests there are no more multiple windows but just one which is the NAFEM.
Market participants, investors, exporters, and financial institutions will need to adapt to this new nomenclature as it becomes the standard terminology for referring to the FX market.
Why the move: The move by the CBN to eliminate segmentation in the FX market is a significant policy shift.
- By unifying the terminology used to describe the FX market, the regulator aims to create a more transparent and consistent environment for market participants.
- This change is expected to facilitate a deeper understanding of the FX market’s operations and regulations.
It’s important for all stakeholders in the Nigerian FX market to be aware of this transition and update their internal systems and documentation accordingly.
Who are the participants in the market? How will authorised buyers such as BDCs access forex for resale?
Will the change in name now translate to availability of forex. APC government from Buhari till now is a flop. So incompetent
Same effect as old and new Naira