FG Plans New Forex Regulations to Strengthen the Naira
The Nigerian federal government is reportedly planning to introduce new regulations in the forex market with the aim of bolstering the value of the naira and curbing illegal currency trading.
The proposed rules would expand the official market to accommodate all legitimate transactions and seek to limit the supply to the parallel or “illicit” black market.
The government is also looking to clear the backlog of nearly $7 billion in foreign exchange demand, establish transparent FX market guidelines, and enhance liquidity in the naira forward market.
The goal is to stabilize and strengthen the naira, which has depreciated significantly in recent months.
The naira has lost approximately 40% of its value since the Central Bank of Nigeria devalued it in June 2023 by unifying the foreign exchange market.
The official exchange rate is significantly lower than the parallel market rate, creating a disparity between the two.
The government is making efforts to address this issue and attract more forex inflows to the official market while curbing activities that contribute to the parallel market’s instability.
The success of these proposed measures will be closely monitored in the coming weeks, with expectations that they will help the naira regain its strength and stability in the foreign exchange market.
Source: Nairametrics
