Two weeks after opening a special foreign exchange window for small and medium enterprises (SMEs), the Central Bank of Nigeria has opened yet another window for investors and exporters.
A circular issued by the CBN on Friday disclosed that the purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.
The points to note:
- Eligible transactions under the new window are to include invisible transactions such as loan repayments, loan interest payments, dividends/income remittances, capital repatriation, management service fees and consultancy fees.
- Also on the eligible list are software subscription fees, technology transfer agreements, personal home remittances and any such other eligible transactions including “miscellaneous payments” as detailed under memorandum 15 of the CBN FX manual.
- The invisible transactions under this window excludes international airlines ticket sales’ remittances, bills of collection and any other trade-related payment obligations, which are at the instance of the customer.
- The permitted invisible transactions and bills for collection are eligible to purchase foreign currency sourced from the CBN Forex window limited to Secondary Market Intervention Sales (SMIS) Wholesale (Spot and Forwards) only.
- Supply of foreign currency to the window shall be through portfolio investors, exporters, authorized dealers and other parties with foreign currency to exchange to naira.
- The CBN shall also be a market participant at the window to promote liquidity and professional market conduct.
As part of the operational requirements of the window, the CBN circular said the exchange rates of the transactions in the window shall be as agreed between authorized dealers and their counterparties.
It also said that the CBN reserved the right to intervene as a buyer or seller, as it deems fit, in the window, adding that information on transactions between authorized dealers shall be reported to the CBN on a daily basis.
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