The Central Bank of Nigeria (CBN) may have succumbed to pressure as it announced a new policy in the Foreign Exchange (FX) market.
The new policy is coming on the back of last Thursday’s directive by the National Economic Council, (NEC), for immediate review of the naira to stem the widening gap between the inter-bank foreign exchange and parallel market rates.
In a statement issued on Monday, the Apex Bank said the new directive takes immediate effect.
It also announced direct additional funding of foreign exchange to banks for onward sales to Nigerians for their personal, basic travel, medical needs and school fees.
The apex bank, however, stipulated that such retail transactions should be settled as a rate not exceeding 20% above the interbank market rate, which finished on Monday at 305 Naira, 25 Kobo to the U.S. dollar.
In addition to this, the central bank also announced a significant reduction in the tenor of its forward FX sales from the current maximum cycle of 180 days, to not more than 60 days from the date of transaction.
According to the CBN, the move would further increase the availability of foreign exchange to all end users.