The CBN new policy

Summary of the Press Conference held by the Governor of the Central Bank on the Flexible Exchange Rate Policy – June 15, 2016
 
·         Market will operate as single market through the interbank
·         FX Rate will be purely market-driven
·         CBN will participate through periodic interventions
·         FX primary dealers will be registered to deal directly with the CBN for large deal sizes. FX primary dealers will deal with other authorised dealers
·         There will be no more spread restrictions
·         The 41 items classified for not valid for FX are still not admissible in FX interbank market
·         CBN may offer long-tenored FX forwards
·         Selling of FX forwards must be trade backed with no pre-determined spreads
·         OTC FX futures will be introduced. The OTC FX futures are bespoke and volumes could be non-standard
·         Non-oil exporters are now allowed unfettered access to export proceeds via the  interbank market
 
Timelines
 
·         Guidelines of the general FX market will be released immediately
·         Guidelines for FX primary dealers will be released immediately
·         FX primary dealers will be appointed and notified by June 17, 2016
·         Interbank FX trading under the new guidelines will begin on June 20, 2016
 
Additional details will be released as soon they are published by the Central Bank.

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