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The Cap on Interbank Foreign Exchange Transactions has been Removed by the CBN

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Today, the Central Bank of Nigeria, CBN, has announced the removal of the spread on Foreign Exchange Transactions.

In a statement from the Central Bank of Nigeria Financial Markets Department, signed by Duke Omolara Omotunde, it was confirmed that a key objective of the ongoing foreign exchange market reforms by the CBN is to promote a market-based price discovery system.

The statement, titled ‘removal of the spread on Foreign Exchange Transactions’ and dated February 8, 2024, was sent to all authorised dealers. It declared the discontinuation of any cap on the spread of interbank foreign exchange transactions and restrictions on the sale of interbank proceeds.

Authorized Dealers are instructed to continue to conduct their foreign exchange transactions on a ‘Willing Buyer and Willing Seller’ basis and adhere strictly to high ethical standards. This includes adopting appropriate price disclosures and transparency for transactions. The statement also highlights the need for all executed transactions to be recorded immediately on the relevant treasury systems and reported to market authorities as stipulated.

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