CBN “Frees Naira” As It Creates New Window for Investors & Exporters
Onome Ohwovoriole
April 21, 2017
Nairametrics| The Central Bank of Nigeria (CBN) has created yet another FX window for investors and exporters. The apex bank had earlier created windows for PTA/BTA, School fees, Small and Medium Scale Enterprises (SMEs) and foreign airlines.
We explained this new circular here
The transactions eligible to access this window include:
a. invisible transactions namely:
Loan repayments, Loan interest repayments, Dividends/Income Remittances, Capital repatriation, Management services fees, Consultancy fees, Software subscription fees, Technology transfer agreements, Personal home remittances, any such other eligible invisible transactions including “Miscellaneous Payments” as detailed under Memorandum 15 of the CBN Forex Manual.
b. Bills for collection
c. Any other trade-related payment obligations (at the instance of the customer).
International Airline Ticket Sales’ Remittances shall only be eligible to access the CBN FX Window (i.e. SMIS – Retail and Wholesale.
The suppliers of FX into this window shall be portfolio investors, exporters, authorised dealers and other parties with foreign currency to change to Naira. The CBN shall be a participant in this window to ensure liquidity and professional market conduct. The CBN also reserves the right to act as a buyer or seller in this window.
FMDQ, according to the circular, will be expected to publish market rates and any other relevant information on its website twice daily (morning and evening).
With this new circular, the CBN is aiming to incorporate transparency into this window. It advises the authorized dealers to promote market transparency by encouraging their corporate clients to ensure that activities in this window are operated on FX trading systems.
Furthermore, FMDQ will develop and publish a new fixing, NAFEX (the Nigerian Autonomous Foreign Exchange Fixing), to support appropriate benchmarking and facilitate derivatives activities in the Investors’ and Exporters’ FX Window.
Below is a copy of the circular.