CBN launches Naira forex futures market
The Central Bank of Nigeria (CBN) on Monday formally flagged off the Naira Settlement Foreign Exchange Market.
A statement from the CBN said the Governor of the Central Bank of
Nigeria, Mr. Godwin Emefiele, expressed delight that the foreign
exchange market in Nigeria has attained the position where participants
in Nigeria can settle foreign exchange futures transactions in Naira.
According to Emefiele, who was represented by the Special Adviser,
Financial Market, Mr. Emmanuel Ukeje, “this product is novel in Nigeria
and it gives comfort regardless of the price at which you have quoted to
buy foreign exchange in Nigeria.
“In the same vein, the product is also expected to provide relief to
Nigerians seeking Dollars to import critical machinery and raw materials
from abroad as they can now lock-in their foreign exchange deals in
earnest against their future demands.”
He reaffirmed the commitment of the apex Bank to ensure the success
of the new foreign exchange market structure and also promised to honour
all obligations arising from future deals.
In his speech at the event, the Managing
Director of the Financial Market Dealers Quote (FMDQ),
Bola Onadeko urged the regulators of the financial markets to strive for
the success of this new foreign exchange initiative by ensuring desired
liquidity.
Earlier in her welcome address, the Chairperson of the FMDQ, Dr Sarah
Alade, represented by Mr Yinka Sani of Stanbic IBTC, noted that the
launching of the hedging product has revolutionized the financial
landscape in Nigeria as the market is now adequately positioned among
the global standards and at the same time provide liquidity for the
market.
She gave an assurance that FMDQ would ensure transparency and innovations in order to attract investors to the Nigerian market.
The Naira-settled OTC Future are non-deliverable forwards where
parties to a contract agree to an exchange rate for a predetermined date
in the future, without the obligation to deliver the underlying United
States Dollars on maturity or settlement date but only required to
settle exchange rate differentials in Naira.
Post a Comment