Finance Minister unveils plan to automate FX market

During the 29th Nigeria Economic Summit (#NES29), Wale Edun, the Minister of Finance and coordinating minister of the Economy, revealed plans for the federal government to automate transactions in the entire foreign exchange market.

Speaking during the first-panel session, Edun highlighted the government’s determination to tackle these challenges head-on.

His comment came shortly after President Tinubu had told summiteers that he has taken steps to deal with liquidity in the fx market and made a commitment to sort out all backlog.

According to him, all dealings in the fx market, from the official to the money changers where huge arbitrage has consistently occurred, will be thoroughly monitored and offenders fished out and punished.

He also disclosed that the President signed two executive orders last week.

One of them is an executive order that allows forbearance for all the cash in the economy to come in and formally boost the money supply legally.

There’s another executive order that allows domestic issuance of foreign currency issues so that it will allow incentive to provide that foreign exchange for whatever source.

He said alongside this and part of a broader sort of review, there is a revamping of the foreign exchange market, which he said will unfold as time goes on.

He admitted that Nigeria’s foreign exchange market is not functioning effectively due to illiquidity and that the government is prepared to do everything required to change the status quo.

“Foreign exchange market will be simplified and reformed such that all legal and legitimate transactions will fall within the purview of the authorities and in the formal foreign exchange market. Anything outside that will be illegal, a criminal offence and will be punished,” Edun stated.

In his comment, Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, assured that the apex bank, going forward, will take its objective of price stability “very seriously indeed.”

He said the plan is to have a foreign market that is fit for purpose and works for everybody, which can be predictable and with no opacity.

“We are going to come out with an elegant document that will tell you the rules,” the governor assured.