What does AFEM mean in UNCLASSIFIED
AFEM stands for Autonomous Foreign Exchange Market. It is a market in Nigeria where individuals, businesses, and banks can freely trade foreign currencies. The AFEM was established by the Central Bank of Nigeria (CBN) in 2017 to liberalize the foreign exchange market and make it more accessible for businesses.
AFEM meaning in Unclassified in Miscellaneous
AFEM mostly used in an acronym Unclassified in Category Miscellaneous that means Autonomous Foreign Exchange Market
Shorthand: AFEM,
Full Form: Autonomous Foreign Exchange Market
For more information of "Autonomous Foreign Exchange Market", see the section below.
Key Features of AFEM
- Market-determined exchange rates: The exchange rates in the AFEM are determined by supply and demand, rather than being fixed by the CBN.
- Transparency: The AFEM is operated through a transparent electronic trading platform, which provides real-time information on exchange rates and trading volumes.
- Accessibility: The AFEM is accessible to all individuals and businesses that have a valid Bank Verification Number (BVN).
Benefits of AFEM
- Access to foreign currencies: The AFEM provides businesses with access to foreign currencies for their import and export operations.
- Improved competitiveness: The market-determined exchange rates in the AFEM help Nigerian businesses to remain competitive in the global market.
- Reduced transaction costs: The electronic trading platform of the AFEM reduces transaction costs for businesses.
Essential Questions and Answers on Autonomous Foreign Exchange Market in "MISCELLANEOUS»UNFILED"
What is the Autonomous Foreign Exchange Market (AFEM)?
The Autonomous Foreign Exchange Market (AFEM) is a market where participants can trade foreign exchange (forex) freely at market-determined rates. It operates independently of the official foreign exchange market, which is controlled by the Central Bank.
What are the advantages of using the AFEM?
The AFEM offers several advantages, including:
- Market-determined exchange rates: Participants can determine the price of foreign currencies based on supply and demand, without government intervention.
- Flexibility: The AFEM allows businesses and individuals to adjust their foreign exchange exposure as needed, enhancing their risk management capabilities.
- Access to a wider pool of liquidity: The AFEM connects participants to a broader network of buyers and sellers, increasing the liquidity available for forex transactions.
What types of participants operate in the AFEM?
The AFEM is open to a range of participants, including:
- Banks and other financial institutions
- Businesses and corporates
- Individuals
- Foreign investors
How are exchange rates determined in the AFEM?
Exchange rates in the AFEM are determined by the forces of supply and demand. When there is a higher demand for a particular currency, its price will rise, and vice versa. The market is influenced by various factors, such as economic conditions, interest rates, and global events.
How is the AFEM regulated?
The AFEM is typically regulated by the central bank or a designated financial authority. The regulations may include setting guidelines for market conduct, reporting requirements, and measures to prevent market manipulation or abuse.
Final Words: The Autonomous Foreign Exchange Market (AFEM) is a key component of Nigeria's financial system. It provides businesses with access to foreign currencies, promotes competitiveness, and reduces transaction costs. The AFEM has played a significant role in liberalizing the foreign exchange market and making it more accessible for businesses.
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