Breaking: CBN Removes Limits on Currency Exchange Spreads, Opts for Market Forces

The Central Bank of Nigeria (CBN) has announced a shift in its foreign exchange policy by removing the cap on the spread for interbank transactions and lifting restrictions on the sale of interbank proceeds.

This move, effected on Thursday, makes for a more market-driven approach to foreign exchange management in the country.

A statement by Duke Omolara Omotunde, Director of the CBN’s Financial Markets Department, sent to all authorised dealers said:

“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.

“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,” the statement advised.