Prof Adegbemi Onakoya, a Finance and Business Transformation expert, has said the Central Bank of Nigeria’s recent circular on harmonizing reporting requirements for foreign currency exposures of banks has boosted activity in the Nigerian Autonomous Foreign Exchange Market, NAFEM, and Naira’s weeks-long gains.
Onakoya disclosed this at the weekend during the Nairametrics Economic Outlook webinar.
He suggested that the recent policies aimed at strengthening the Naira yielded results as the it maintained four weeks of gains against the US dollar, closing at N1,251.05 per dollar last Friday.
Onakoya stressed that CBN’s January 31, 2024 circular to banks, titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” which mandated the harmonization of reporting and required banks to maintain adequate stocks of high-quality liquid foreign assets, like cash and government securities, in each significant currency, has boosted transparency in the foreign currency market.
“In a January 31, 2024 letter to banks on harmonization of reporting and the requirement of foreign currencies. Again, this brings transparency into the foreign currency market. At least we know we are owing.
“Essentially, the directive spurred increased activity in the Nigerian Autonomous Foreign Exchange Market, NAFEM.
“We now see a daily turnover of about $854 million weekly. That is about $1 million in a week. About four times increase,” Onakoya stated.
Naira appreciation: Onakoya reveals CBN’s policy responsible for gains in forex market
