FMDQ introduces reference rate for special FX window for investors

By Babajide Komolafe
THE Financial Market Dealers Quote, FMDQ, yesterday, introduced a reference exchange rate for the newly introduced special foreign exchange window for investors and exporters.

The CBN created the new window last week to boost liquidity in the foreign exchange market and ensure timely execution and settlement for eligible transactions. To support activities in this new window, FMDQ said it has developed the Nigeria Autonomous Foreign Exchange Rate Fixing (NAFEX), which would be published 12 noon very day.

FMDQ explained that NAFEX is the FMDQ reference rate for foreign exchange (FX) activities in the Investors’ & Exporters’ FX Window and is designed to represent Spot FX market rates in the Window. NAFEX rates will be generated independently and objectively and published every business day at 12 noon or at a time advised by FMDQ. The NAFEX commenced yesterday.

According to a statement from the CBN, “transactions eligible to access foreign exchange in the new window include: Invisible transactions (excluding International Airlines Ticket sales’ remittances), Loan repayments, loan interest payments, dividends/income remittances, capital repatriation, management services fees, consultancy fees, etc; Bills for collection and; Any other trade-related payment obligations (at the instance of the customer).”

The statement added that “the supply of foreign currency to the window shall be through portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange to Naira. The CBN shall also be a market participant at this window to promote liquidity and professional market conduct.”

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