By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has granted Bureaux de Change (BDC) operators temporary access to the Nigerian Foreign Exchange Market (NAFEM), which is the official market, as part of efforts to further strengthen the Naira in the currency market.
The CBN in a notice on Friday said BDC operators would have access to FX at the official market from December 19, 2024, to January 30, 2025, with a weekly cap of $25,000.
Transactions require upfront funding at prevailing rates and must follow a maximum of 1 per cent spread.
The Naira traded at the spot market at N1,541.38/$1 based on computation on the Bloomberg BMatch system computed by FMDQ Securities Exchange Limited.
The CBN recently launched the Electronic Foreign Exchange Matching System (EFEMS) to build transparency in the system, but this excluded street forex hawkers. This initiative has fortified the value of the Naira against the US Dollar at the official market.
The platform, which became operational on December 2, 2024, has enhanced operational efficiency in Nigeria’s FX market, with banks mandated to be on the system to trade forex.
The EFEMS initiative, according to Mrs Omolara Duke, the CBN’s director of the financial markets department, was designed to ensure “transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations.”
Between December 2 when the new electronic trading platform commenced and December 19, 2024, the Naira recorded over N250 gain over the Dollar in the official FX market.
The CBN also issued comprehensive guidelines for the operations of the interbank foreign exchange (FX) trading system via EFEMS, pegging the minimum tradable amount at $100,000, with incremental clip sizes of $50,000.00, to promote transparency and efficiency in the FX market.
This development has forced currency speculators and illicit market operators to look elsewhere, pushing up demand to the parallel market and the BDCs.
To further ease the pressure on these unregulated markets, the CBN will allow BDCs to access the market with the hope of checking demand and further supporting the Naira.