Nigerian Central Bank to Rename Official Forex Market as Nigerian Foreign Exchange Market (NFEM)
The acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, announced that the official foreign exchange market, previously known as the Investors and Exporters (I&E) window, will be renamed the Nigerian Foreign Exchange Market (NFEM).
This decision comes after the CBN abolished segmentation in the foreign exchange market and consolidated all segments and rates into the I&E window, which is now regarded as the sole official forex market. Shonubi made this announcement while delivering a lecture on diaspora remittances and Nigeria’s economic development. He also highlighted challenges in the forex market, including the diversion of diaspora remittances to the parallel market and the naira’s recent record low against the dollar.
Opinion:
The decision to rename the official forex market as the Nigerian Foreign Exchange Market (NFEM) is likely part of the CBN’s efforts to streamline its approach to forex trading and bolster its control over the market. The move to consolidate all segments into the I&E window and rename it underscores the CBN’s determination to ensure a unified and regulated forex market.
The challenges in the forex market, such as the naira’s depreciation and the diversion of remittances to the parallel market, highlight the complexities the CBN faces in maintaining stability and formalizing forex transactions. These challenges underscore the need for effective policies to attract transactions to the official market and discourage unofficial activities.