Stocks gain following CBN new FOREX policy.

Following the announcement of the flexible foreign exchange guidelines, the Nigerian Stock Exchange All-Share Index gained 3.17 per cent on Wednesday

The development boosted the NSE market capitalization by N295bn as the value rose to N9.579tn from Tuesday’s close of N9.284tn, while the NSE ASI hit 27,891.96 basis points from 27,034.05 basis points.

   Aggregate of 588.427 million shares worth N3.477bn were traded in 5,088 deals at the close of trading on the floor of the Exchange on Wednesday.

To implement the new forex policy, the CBN governor said the apex bank would on Friday appoint primary and secondary dealers, adding that their dealership level would be categorised based on the volume of transaction that they could handle.

He said based on the assessment of the CBN, the number of primary dealers would be between eight and 10 financial institutions with a minimum transaction volume of $10m.

Emefiele said, “We have decided that the CBN will deal primarily with what we call the foreign exchange primary dealers. We will have non-primary dealers and primary dealers. The guidelines for qualification for being a foreign exchange primary dealer will be on our website.

“There are a number of qualifications, either the size of the bank, or the size of forex transactions it had done before, the level of liquidity, the extent to which those banks have complied with the CBN guidelines and regulations in the past, and their level of preparedness in terms of being able to provide all the soft and hardware that is needed to operate in a very transparent manner.”

The governor also said the market would operate as a single structure through the inter-bank/autonomous window; while the exchange rate would be purely market-driven using the   Thomson-Reuters Order Matching System as well as the Conversational Dealing Book.

The CBN, according to him, will also participate in the foreign exchange market through periodic interventions to either buy or sell foreign exchange as the need arises.


In order to enhance liquidity in the market, he said the CBN would also offer long-tenured foreign exchange forwards of six to 12 months or any tenure to authorised dealers.The governor said with the new policy, the sale of foreign exchange forwards by authorised dealers to end-users must be trade-backed, with no predetermined spreads.