April 21, 2017/CBN

Click here to Download Full PDF Circular

Introduction

The Central Bank of Nigeria (CBN), in a continuing effort to deepen the foreign exchange (FX) market and accommodate all FX obligations, hereby announces a special window for Investors, Exporters & End-users (hereinafter referred to as the “Investors’ & Exporters’ FX Window” or the “Window”). The purpose of this Window is to boost liquidity in the FX market and ensure timely execution and settlement for eligible transactions.

Permitted Transactions

Transactions eligible to access the Window include:
a) Invisible Transactions (excluding International Airlines Ticket Sales’ Remittances) – Loan Repayments, Loan Interest Payments, Dividends/Income Remittances, Capital Repatriation, Management Services   Fees,   Consultancy   Fees,   Software   Subscription    Fees, Technology Transfer Agreements, Personal Home Remittances and any such other eligible inVisible transactions  including  ‘Miscellaneous Payments’ as detailed under Memorandum 15 of the CBN  Foreign Exchange Manual.

b) Bills for Collection

Note
The above permitted invisible transactions (a) and Bills for Collection (b) are eligible to purchase foreign currency i.e., US Dollars  sourced  from  the CBN FX Window  limited  to Secondary

Market Intervention Sales (SMIS) Wholesale (Spot and Forwards) only.

International Airlines Ticket Sales’ Remittances shall only be eligible to access the CBN FX Window (i.e., Secondary Market Intervention Sales (SMIS) — Retail and Wholesale, Spot and Forwards). 

c)      Any other trade-related payment obligations (at the instance of the customer)

Participants

The 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 shall also be a market participant at this Window to promote liquidity and professional market conduct.

Price Discovery

Due to the slow progress made by corporates in on-boarding the FMDQ Thomson Reuters FX Trading & Auction Systems, participants at this Window shall trade via telephone until appreciable progress is made with the FX Trading Systems On—boarding process. Authorised Dealers are therefore advised to promote market transparency by encouraging their corporate clients  to on-board  to ensure the actiVities of the Window are operated on the FX Trading Systems. Participants are advised to ensure that all trade conVersations are recorded and auditable. Consequently, to proVide price discovery to the market, FMDQ OTC Securities Exchange (FMDQ) shall be charged with polling buying  and  selling rates and other relevant information from the major participants in the market to provide participants with the requisite price discovery, and the CBN with the indicative  market  depth  until the market  migrates  to  the FX  Trading Systems

Therefore FMDQ shall publish on its website (www fmdqotc com) market rates and any other relevant information twice daily as follows:
(i)    Indicative Opening Mid-Rate – 9:00 AM daily
(ii)  Indicative Closing Mid-Rate – 4:00 PM daily

Furthermore. to support appropriate benchmarking and facilitate derivatives actiVities in the Investors’ & Exporters’ FX Window, FMDQ will develop and publish a new fixing, NAFEX (the Nigerian Autonomous Foreign Exchange Fixing).