CBN Launches Dollar to Naira Price Verification Portal
The Central Bank of Nigeria (CBN) is persistently working to maintain the stability of the naira against the dollar within the foreign exchange market. As part of its ongoing efforts, the CBN has introduced a novel approach—a foreign exchange price verification Portal tailored for importers. This newly unveiled system is set to become operational by the conclusion of August 2023, and its successful execution could potentially bring about substantial transformation.
In a recent communication from the CBN’s Trade and Exchange Department, dated Thursday, August 17, 2023, it was revealed that the central bank has launched a portal specifically designed for a price verification system (PVS) targeting importers involved in the procurement of foreign currencies. The scheduled launch date for this system is Thursday, August 31, 2023. This initiative is poised to enhance the transparency of foreign exchange transactions, rendering it more comprehensible for all parties involved.
The primary objective of the PVS portal is to furnish importers with comprehensive information about the procedures for obtaining foreign currencies and the corresponding exchange rates. This information, which can be accessed through the portal, will be a prerequisite for customers initiating applications for Forms M—a mandatory trade document required for conducting trade activities. This mandate underscores the significance of the price verification report generated from the portal, which must accompany every Form M submission.
The CBN has emphasized that the usage of this system is obligatory for securing foreign exchange via the official window. In light of this, the CBN has advised all authorized dealers to inform their clients about this development. The apex bank has also issued a stern caution against any instances of non-compliance, indicating that infringements will result in appropriate penalties.
The CBN’s stance on forex matters has been consistent. The regulatory bank has maintained that it doesn’t attribute the depreciation of the naira solely to market forces. According to Folashodun Shonubi, the acting CBN governor, after discussions with President Bola Tinubu, it was emphasized that the changes witnessed in the parallel forex market are influenced by speculative demand rather than purely economic supply and demand dynamics.
The introduction of the new price verification system is anticipated to curtail manipulative practices and strategies employed to purchase foreign currency at the official rate from banks and subsequently sell it on the black market. Through this proactive measure, the CBN aims to mitigate the opportunities for exploiting the disparity between rates and ultimately contribute to a more stable forex market.
