Fed Govt Announces Change to Foreign Exchange Market
By Patience Ikpeme
The federal government has unveiled plans for a comprehensive transformation of the foreign exchange market, aimed at simplifying, digitalizing, and regulating currency exchange processes. The goal is to create a formal market where all legal and legitimate transactions can occur, ensuring stability and liquidity.
During a panel session at the 29th Nigeria Economy Summit Group (NESG) conference in Abuja, the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, outlined the changes. He emphasized that unauthorized activities and fluctuations in exchange rates caused by individual transactions will be strictly regulated and considered illegal.
The “revamped” foreign exchange market will operate similarly to a stock exchange, with rules and regulations in place to prevent individual transactions from significantly impacting exchange rates. The market will be digitized and integrated with various platforms, such as banks, bureaus de change, and mobile apps, to ensure uniformity and accessibility.
The government aims to simplify transactions for common purposes, such as paying school fees or health bills, by requiring individuals to provide certain identification details, such as a BVN or NIN. This will enable them to conduct transactions in the formal, regulated market.
Furthermore, the Minister of Finance disclosed that $10 billion in foreign exchange will flow into the economy in the coming weeks, bolstering the country’s foreign reserves. This influx of funds is expected to increase liquidity in the foreign exchange market.
The changes in the foreign exchange market are part of the government’s broader efforts to stimulate economic growth and attract foreign investors. The Central Bank of Nigeria (CBN) Governor, Mr. Yemi Cardoso, emphasized the importance of managing the market to make it more predictable and accessible for everyone. The government is committed to maintaining price stability and creating clear rules for long-term economic growth.
Minister for Budget and Economic Planning, Senator Abubakar Atiku Bagudu, highlighted the administration’s commitment to a budget based on a plan, ensuring clarity and certainty in policies. The government aims to invest in priority areas such as security, agriculture, and economic growth to achieve inclusivity and food security.
The NESG Chairman, Mr. Niyi Yusuf, emphasized the need for immediate and concerted efforts to achieve a Multi-Trillion Dollar Economy within a decade. He called for big, bold actions and tough choices, with the NESG ready to support the government in modeling these decisions and implementing palliative measures.
The transformation of the foreign exchange market and the influx of foreign exchange funds are expected to have a positive impact on the Nigerian economy, creating a more stable and accessible environment for businesses and individuals alike.
