FMDQ renames “I&E Window” as “NAFEM”
The Central Bank of Nigeria (CBN) has recently made a notable announcement regarding the Nigerian Foreign Exchange (FX) market.
In a market notice, the CBN stated that it will be changing the terminology used in reference to the Investors’ and Exporters’ (I&E) FX Window. Instead, it will now be referred to as the Nigerian Autonomous Foreign Exchange Market (NAFEM).
This change is in line with the CBN’s press release titled “Operational Changes to the Foreign Exchange Market,” which was issued on June 14, 2023.
The main objective behind this revision is to eliminate any segmentation within the FX market and establish greater consistency in terminology. By replacing the I&E FX Window with the NAFEM, the CBN aims to create a more unified and streamlined FX market in Nigeria.
This change is expected to bring about a more cohesive and transparent foreign exchange system, benefiting both investors and exporters in the country.
Additionally, this change aims to align the nomenclature of the formal FX markets with the provisions of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, which specifically references the Nigerian FX Market as the Autonomous Foreign Exchange Market.
The transition from the I&E FX Window to NAFEM signifies a significant shift in the Nigerian FX landscape.
FMDQ Securities Exchange Limited (FMDQ Exchange), a major player in the Nigerian financial market, has taken the initiative to update and harmonise all existing references to the I&E FX Window across applicable systems and market documentation.
This change will also extend to future reports and communications related to the Nigerian FX market.
This development is set to have a notable impact on how stakeholders in the FX market perceive and interact with this crucial segment of Nigeria’s financial ecosystem.
This suggests there are no more multiple windows but just one which is the NAFEM.
Market participants, investors, exporters, and financial institutions will need to adapt to this new nomenclature as it becomes the standard terminology for referring to the FX market.
The move by the CBN to eliminate segmentation in the FX market is a significant policy shift.
By unifying the terminology used to describe the FX market, the regulator aims to create a more transparent and consistent environment for market participants.
This change is expected to facilitate a deeper understanding of the FX market’s operations and regulations.
It’s important for all stakeholders in the Nigerian FX market to be aware of this transition and update their internal systems and documentation accordingly.
