Nigerian Forex Market : All You Need To Know
In this article we would be giving you all the details you would be needing on the Nigerian Forex Market ( Nigerian Foreign Exchange Market ). We would be explaining what foreign exchange mean, the history of Forex in Nigeria and also the structure of the Nigerian foreign exchange market.
What Is The Meaning Of Forex?
This is the first question that pops up when the word ‘Forex’ is being mentioned to a lot of people. Well Forex is simply the market in which foreign currencies are traded. The word ‘Forex’ is a short form of Foreign Exchange and is also referred to among people as FX. The foreign exchange ( Forex ) market is the largest liquid market in the world. This market includes all the currencies in the world and has an average traded values that can be trillions of dollars every day.
So with this definition the Nigerian Forex market is simply the trading of the Nigerian Naira with other currencies in the world.
All You Need To Know About The Nigerian Forex Market History
In the year 1958 before the exploration of crude oil in Nigeria, agricultural exports contributed the bulk of foreign exchange receipts and the fact that the Nigerian pounds was at that time of the same value as the British Pounds Sterling, there was little development in the Nigerian Foreign Exchange market. The establishment of the Central Bank of Nigeria ” CBN ” was a turning point in the Nigeria foreign exchange scene as this was one of the paramount task of the new bank. Exports of crude oil improved in Nigeria in the 1970s and this enhanced foreign exchange receipts in the country, the oil boom. of that period also led to a boom of the Nigerian foreign exchange. This led to the need for proper management of the Nigerian Foreign Exchange ( Forex ) so as to avoid shortages of the currency in the Nigerian Forex Market . This led to the introduction of the Second-tier Foreign Exchange Market ( SFEM ) in the year 1986 and lots of reforms where also made periodically to protect the Naira. The Nigerian Forex Market was liberalised in the year 1995 with the introduction of an Autonomous Foreign Exchange Market ( AFEM ) and also the Bureaux de Change were accorded the power to buy and sell in the Nigerian Forex market .
Structure of Nigerian Forex Market
The Nigerian Forex market has witnessed a lot of changes over the years. In the year 1986 the Second-tier Foreign Exchange Market (SFEM) was introduced, while the unified official market was introduced the following year. The Bureaux de Change were licensed in the year 1989 SL as to give small users access to the Nigerian Forex market . In the year 1995 the autonomous Foreign Exchange Market ( AFEM ) and the Inter-bank Foreign Exchange Market ( IFEM ) in the year 1995 and 1999 respectively.
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Tags: Nigerian Forex Market , Second-tier Foreign Exchange Market , SFEM , Autonomous Foreign Exchange Market , AFEM , Inter-bank Foreign Exchange Market , IFEM