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Four Nigerian banks authorized as FX dealers

Four banks have fully met the criteria to be lead players of the Nigerian Foreign Exchange market.

The lead players, who would be known as Foreign Exchange Primary Dealers, FXPD, will include FirstBank of Nigeria Limited, Zenith Bank Plc, United Bank for Africa Plc and Guaranty Trust Bank Plc.

The Central Bank of Nigeria had spoken about the creation of this primary dealers in its recently released Foreign Exchange Policy.

The CBN said: “To improve the dynamics of the market, the apex bank will introduce Foreign Exchange Primary Dealers (FXPD), who would be registered with the CBN to deal directly with the apex bank for large trade sizes on a two-way quotes basis

“These primary dealers shall operate with other dealers in the inter-bank market, among other obligations that will be stipulated in the Foreign Exchange Primary Dealers (FXPD) Guidelines.

“There will be no predetermined spread on foreign exchange spot transactions executed through the CBN intervention with primary dealers, while all foreign exchange spot purchased by the authorized dealers are transferable in the inter-bank foreign exchange market.”

Although the CBN’s guidelines indicate that about eight or 10 banks would be registered as FXPD, only these four have qualified thus far.

In arriving at the top 10, the apex bank would consider a number of factors which include shareholders funds, liquidity ratios and volume of foreign currency assets of banks in.

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