The Central Bank of Nigeria (CBN), in a continuing effort to deepen the foreign exchange (FX) market and accommodate all FX obligations, is to commence a new special window for Investors, Exporters & End-users today, April 24.
A circular issued by the CBN disclosed that the purpose of the fresh forex widow for investors and exporters was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.
The circular signed by the Bank’s Director in charge of Financial Markets, Dr. Alvan Ikoku, listed eligible transactions under the new window to include invisible transactions such as loan repayments, loan interest payments, Dividends/Income Remittances, Capital Repatriation, Management Service Fees and Consultancy fees.
Also on the eligible list are software subscription fees, technology transfer agreements, personal home remittances and any such other eligible transactions including ‘miscellaneous Payments’ as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.
While explaining that the invisible transactions under this window excludes international airlines ticket sales’ remittances, the circular added that the window covered Bills of Collection and any other trade-related payment obligations, which are at the instance of the customer.
The circular further clarified that the permitted invisible transactions and Bills for Collection were eligible to purchase foreign currency sourced from the CBN Forex window limited to Secondary Market Intervention Sales (SMIS) Wholesale (Spot and Forwards) only.
On participants in the new window, it disclosed that supply of foreign currency to the window shall be through portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange to naira. The CBN, it added, shall also be a market participant at the window to promote liquidity and professional market conduct.
Taking cognisance of the slow progress made by corporates in on-boarding the FMDQ OTC Securities Exchange (FMDQ) Thomson Reuters FX Trading & Auction Systems, the CBN said participants at the new window would trade via telephone until appreciable progress is made with the FX trading systems on-boarding process.