FG Adopts Automation for Forex Transactions Amid Naira’s Decline to 1,220/Dollar

The federal government has announced its intention to automate all foreign exchange transactions in order to curb Naira speculation and arbitrage. Wale Edun, the Minister of Finance and the coordinating minister of the Economy, revealed this at the first-panel session of the 29th Nigeria Economic Summit (#NES29).

He said that the government would closely monitor and sanction any irregularities in the FX market, from the official channels to the money changers who have been exploiting the wide gap between rates. 

According to him, “the foreign exchange market will be simplified and reformed such that all legal and legitimate transactions will fall within the purview of the authorities and in the formal foreign exchange market. Anything outside that will be illegal, a criminal offence and will be punished,” 

He also said that President Tinubu had signed two executive orders last week to address the liquidity issue in the FX market and clear the backlog.

One of the orders allows for a grace period for all the cash in the economy to be formally declared and added to the money supply. The other order permits the domestic issuance of foreign currency bonds to encourage the inflow of foreign exchange from various sources.

He acknowledged that Nigeria’s foreign exchange market was not functioning effectively due to lack of liquidity and that the government was committed to implementing a comprehensive reform of the market, which would be unveiled soon.

Also speaking on the FX market, the Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, emphasized the Apex bank’s commitment to its goal of price stability in the future.

He explained that the aim is to create a foreign market that is suitable for everyone’s needs and expectations, which can be consistent and transparent.

“The rules will be clearly stated in a well-written document,” Cardoso promised.