In a notable turn of events, the financial markets in Nigeria responded positively to recent reforms implemented by the Central Bank of Nigeria (CBN), with the Naira experiencing a significant 13.3% appreciation against the Dollar on the parallel market. This welcomed shift saw the Naira closing at N1,350 to the Dollar, marking a noteworthy improvement from the previous day’s rate of N1,530/$.
The CBN’s strategic initiative, aimed at encouraging individuals to utilize the official FX market for transactions, appears to be gaining traction. The official exchange rate now presents a more appealing option for conducting business, contributing to the observed positive market dynamics.
Despite the CBN’s interventions to stabilize the currency, the local currency surpassed parallel market prices, closing at N1,461.90/$ at the official Nigerian Autonomous Foreign Exchange (NAFEX). This represented a marginal decline compared to the previous day’s rate of N1,455.59/$.
Deposit Money Banks (DMBs) have proactively taken steps to comply with the CBN’s directive for the swift repatriation of export proceeds into export domiciliary accounts. The guidelines outline the necessity for proceeds to be repatriated within specific time frames, with banks certifying the receipt promptly.
As part of the revised guidelines, the CBN issued new directives on International Money Transfer Services (IMTO) in Nigeria. The minimum share capital for prospective operators was set at $1 million, accompanied by a non-refundable application fee of N10 million, subject to annual renewal.
The CBN’s emphasis on compliance with the FX repatriation regime is reflected in emails sent by banks to exporters, requesting relevant documents to facilitate timely transaction processing. The guidelines mandate that proceeds of oil and non-oil exports be repatriated within specified periods, with penalties for non-compliance.
The positive momentum extended to the official FX window, witnessing an increase in daily turnover to $156.86 million on Thursday from $134.07 million on the previous day, indicating a 17.01% rise. The highest spot rate recorded was N1,526/$1, while the lowest spot rate recorded was N891/$1.
While the market’s positive response reflects confidence in the CBN’s reforms, the central bank continues to underscore the importance of compliance, imposing penalties for non-compliance with the FX repatriation regime. The revised IMTO guidelines aim to enhance transparency and efficiency in foreign exchange market transactions, fostering increased diaspora remittances and foreign capital inflows.
In conclusion, the recent market dynamics and the positive response to CBN’s measures suggest a promising outlook. However, the effective implementation of these reforms and continued adherence to regulatory guidelines will play a crucial role in sustaining the positive momentum in Nigeria’s financial landscape.