The Central Bank of Nigeria has been hailed by analysts for abandoning its Naira peg rate for a more flexible exchange rate, after previous refuting the decision even as its external reserves plunged and inflation surged to a six-year high.

Here are the key aspects of the new forex guidelines.

CBN will participate in the market through periodic interventions to either buy or sell forex.

The central bank periodic interventions, would allow the CBN to regulate possible market imbalances, either to prop up Naira against the US dollar or to lower the Naira to stimulate the economy through exports. This will also allow the central bank to manage the activities of Forex Primary Dealers (FXPD), since there is no predetermined spread between the CBN and FXPD, which means spread can also be adjusted to accommodate the current market situation.

CBN to introduce non-deliverable over-the-counter naira-settled futures.

The introduction of non-deliverable forward, perhaps is the most unique of all the guidelines, one because it will help curtail the loophole created in the previous forex policy that allow speculators determine the exchange rate at the parallel market, and also encourage businesses and investors to hedge against eventualities. Hence, eliminate hoarding due to fear of uncertainties.

What this means is that, if you need forex transaction in December, you can peg your foreign exchange rate at let’s say N250 and if in December exchange rate is N270, the central bank will offset the N20 gap, such that you are not losing any money.

“But if the rate on that day is lower than the deal date rate, you’ll pay the Naira equivalent.”

Again, it will encourage capital importation from foreign investors, since they can now hedge against a further plunge in oil prices and at the same time buy forex at a predetermined rate to remit proceeds.

Non-oil exporters now allowed unfettered access to their FX proceeds.

Another bold move, is allowing non-oil exporters unbridled access to their FX proceeds, this initiative has officially brought back diversification agenda to the table and indicate the readiness of the government to tackle Nigeria’s mono-crude oil status. Especially, knowing that non-oil sector contributed 89.71 percent to the first quarter GDP, after falling 5.77 percent, the highest in years.

However, this does not mean gauge of consumer prices (inflation) will drop from the current 15.6 percent, if any changes it might surge to 16 percent in the second quarter pending the time the current policy would have filtered through key industries.

Overall, the flexible exchange rate will once again position Nigeria as an investment destination, boost job creation, enhance importation, increase consumer confidence and modulate consumer prices in the long run if well implemented.

http://investorsking.com/understanding-key-aspects-of-cbns-new-forex-guidelines/

Ok

Okay thank u

Buhari took his time

We did not have to suffer like this

I guess this is his bucket list last thing to do

We wish you well!

Land For Sale,,
Dasuki only allowed to prize please

Good move by CBN. But what are the shortcomings of this deal. Nigerians need more enlightenment in case there is unforeseen circumstance.

Una don come again


Kachikwu stop trying to explain...we don't want to undastand

Ok

floating..

Reading

Lemme just pretend like I know what that post is saying

It is long overdue.


That is the geography of the Earth's surface.

I am just waiting for Monday to come so that I will know the exchange rate.

Oh, My Naira!!!...

Everyday Dollar and Pounds dey Intimidate u. Y na?

Our polithiefcians Has Made u useless that they prefer holding Dollars even in your own territory.

Naira, Y r u so weak?..

Cant u fight for yourself?

Naira, Wake up now and fight. I mean Call on your God, this Humilation is just too much.

Ur Jnr Brother Kobo has been rusticated from the institution of Money. the new born children only know of Kobo in thier books. please, Dont let them useless u... Even Cefas now drag space with u in the Currency market. u wey be Elder brother to Cefas now wan be age mate.


Naira, Please dont sleep and let this people make a fool of u for selfish reason.

Brother Pounds and Dollars are always respected. please command your respect now.

Kill those polithiefcians that keeps dollars in your territory than keeping u

Why should i

All dis bank yeye strategics don't increase the cash in my wallet

How much is Naira to Dollar?
That's what the average Nigerian out there wants to know.
All this big grammar explanations are the reason why the common business man gets shortchanged at the end. There are too many hidden clauses in this policy.
Just watch out and see.
Naira won't stand in one place like is obtained elsewhere. It will continue to jump here and there.
Most of the people running this government, from the executive to the legislative arm are not fit enough to run local governments in an organised society.

Hmm

I pray d policy does Us good....

May d almighty Lord give our leaders wisdom,knowledge and understanding to lead Us right...

God bless Nigeria

God bless we d citizens

Ok I've been meaning to ask.....how can someone send money from Nigeria to the UK?

It will sound more good in the first announce, when it is established, it affects !!!

Fake Nigeria !!!

This naira devaluation method using back down process. Diaris God O
Before thus useless new forex policy, loads of groundwork was required in the economy, we're they implemented, NO!!!
Failed forex policy!!!

Let's just say we can now see some positive movements from the government of the day. The last few weeks have brought back some hope.

TrollTrap:
Ok I've been meaning to ask.....how can someone send money from Nigeria to the UK?

How much do u want to send?

Noted


Becouse it is affecting the price of P. O. P material ooooooooooooooooo

Its actually a very good move, lets hope it will be well implemented. But from the guidelines, CBN impressed me for the first time.

It shall all end in praises.

To me this is a welcome development we just hope they do the needful on time.

To the mode that banned me, God is not happy with you. I reported you to him, and you will here from him soon.

oya I don show yarn me something

Zico5:
Good move by CBN. But what are the shortcomings of this deal. Nigerians need more enlightenment in case there is unforeseen circumstance.

Prices of goods and commodities, especially imported goods, are expected to go up first before crashing later.

But there are more benefits than the initial shortcomings.