Central bank of Nigeria in a question and answer note explained the grey areas in the new foreign exchange policy introduced recently. Below is what the apex bank said
What does it mean to collapse all segments in the forex market into investors’ and exporters window?
This means all eligible FX transactions in the market shall only be done via the I&E window, all other windows cease to exist.
How does the I&E window function?
The I & E market functions by a willing buyer, willing seller system, where an entity with demand for. FX seeks out another entity with FX to sell at an agreed price through an authorised dealer.
How will the order book ensure transparency of orders and seamless transactions?
The order book is an electronic trading system where demand can be matched to supply on any given trading day and is visible to the entire market.
Are there changes in the application process for accessing forex under the new policy?
There are no changes in the application process. All applications shall be through the banks and all documentation requirements remain the same.
Can the 43 non eligible items access forex at the I&E window?
The status quo remains on the 43 non-eligible items. The items are not permitted to be funded from the | & E window.
What are government related transaction?
These are transactions with Ministries, Departments and Agencies (MDA).
What is the weighted average rate, and how is it calculated to 2 decimal places?
This is a summation of volume of FX traded multiplied by the various rates at which the deals are consummated, divided by total volume of trade.
What is the concept of the willing buyer, willing seller model?
In this model, rates are mutually agreed by both parties.
How do we access BTA, PTA, Medical and school fees with the introduction of the new policy?
PTA, BTA, and other invisible transactions continue to be accessed through the banks at the prevailing market rate.
