CBN introduces N1.00k spread limit on inter-bank transactions

The Central Bank of Nigeria (CBN) on Monday introduced a new spread limit of N1.00k on inter-bank transactions.

It stated this in a circular issued on Monday, which is aimed at further developing the foreign exchange market and improving its structure.

The new circular, among other provisions, allows authorized dealers to sell their excess foreign currency trading positions to other authorized dealers without seeking prior approval from the CBN.

According to the circular, the fund purchased by an authorized dealer from another authorized dealer in the inter-bank market shall not be held in position overnight by the buying authorized dealer or sold to another authorized.

In a circular signed by Alvan Ikoku, director, financial markets department, the CBN said authorized dealers shall not exceed their respective foreign currency trading position limit (FCTPL) without the approval of the CBN, adding that it shall strictly monitor compliance with the FCTPL.

The CBN again advised authorized dealers to encourage their clients to on-board the FMDQ-advised forex trading system immediately, to avoid sanctions, foster the speedy migration of the activities of the investors and exporters window unto the forex trading system and, in turn ensure that the objective of deepening the market is achieved.

 

Hope Moses-Ashike