The federal government is planning to introduce new rules to the forex market aimed at boosting the value of the naira and stifling the activities of illegal currency trading according to a Bloomberg report quoting a senior government official.
The new rule will include expanding the official market to accept all legitimate transactions and ensuring the “illicit” black market do not get supply.
He also explained in an interview that the federal government’s plans include clearing the backlog of foreign exchange demand estimated at almost $7 billion, establishing transparent guidelines in the FX market and increasing liquidity in the naira forward market.
The naira has lost around 40% of its value since the Central Bank devalued it in June through the unification of the foreign exchange market.
While the policy was geared towards attracting more liquidity, things haven’t gone on as planned.
The naira traded at N993 to the USD in the NAFEM yesterday and in the past week, it has traded at almost N1,300 in the parallel market. This brought the chasm between the official window and the parallel market to around 40%.
During the Nigeria Economic Summit last week, Finance Minister Wale Edun said the federal government is expecting around $10 billion in forex inflows in a few weeks and President Tinubu will sign two executive orders aimed at reversing the flow of FX from the official window to the parallel market.
The orders are in the process of being gazetted according to Mr Edun.
