Cbn new foreign exchange policy

The Central Bank of Nigeria (CBN) has introduced a new foreign exchange policy aimed at improving the management of foreign exchange in the country. The policy, which took effect from October 2020, has several key components that aim to address the challenges faced by the foreign exchange market in Nigeria.

Some of the key features of the new foreign exchange policy include:

  1. Unification of Exchange Rates: The CBN has unified the exchange rates for all foreign exchange transactions, eliminating the multiple exchange rates that existed previously. The new exchange rate is N360 to the US dollar.
  2. Introduction of a New Foreign Exchange Window: The CBN has introduced a new foreign exchange window, known as the "Investment and Export Window", which allows for the sale of foreign exchange to investors and exporters at a rate of N360 to the US dollar.
  3. Increased Allocation to Investors and Exporters: The CBN has increased the allocation of foreign exchange to investors and exporters, with a view to encouraging foreign investment and promoting exports.
  4. Improved Transparency and Accountability: The CBN has introduced measures to improve transparency and accountability in the foreign exchange market, including the publication of daily foreign exchange rates and the introduction of a foreign exchange management system.
  5. Restrictions on Foreign Exchange Transactions: The CBN has introduced restrictions on foreign exchange transactions, including a ban on the sale of foreign exchange to Bureau de Change operators and a limit on the amount of foreign exchange that can be taken out of the country by individuals.
  6. Increased Focus on Non-Oil Exports: The CBN has introduced measures to promote non-oil exports, including the establishment of an Export Development Fund and the introduction of a non-oil export incentive scheme.
  7. Improved Monitoring and Regulation: The CBN has introduced measures to improve monitoring and regulation of foreign exchange transactions, including the establishment of a foreign exchange monitoring committee and the introduction of a foreign exchange reporting system.

The objectives of the new foreign exchange policy include:

  1. Stabilization of the Exchange Rate: The policy aims to stabilize the exchange rate and reduce the volatility that has characterized the foreign exchange market in Nigeria.
  2. Promotion of Foreign Investment: The policy aims to promote foreign investment in Nigeria by providing a stable and attractive investment environment.
  3. Promotion of Exports: The policy aims to promote exports by providing incentives and support to exporters.
  4. Improved Management of Foreign Exchange: The policy aims to improve the management of foreign exchange in Nigeria by introducing a more transparent and accountable system.

Overall, the new foreign exchange policy is aimed at promoting economic growth and stability in Nigeria by improving the management of foreign exchange and promoting foreign investment and exports.