CBN Battles Forex Market Liquidity, Amends Diaspora Remittance Rule

The Central Bank of Nigeria says it had amended the rules for receipt of diaspora remittances as part of its efforts to boost the foreign exchange market.

It said this in a circular on entitled ‘Amendment to procedures for receipt of diaspora remittances,’ which was signed by Director, Trade and Exchange Department, Dr O. S. Nnaji.

The CBN said to liberalise, simplify and improve the receipt and administration of diaspora remittances into Nigeria, beneficiaries of diaspora remittances through International Money Transfer Operators should henceforth, receive such inflows in foreign currency through the designated bank of their choice.

It added that such recipients of remittances may have the option of receiving these funds in foreign currency cash or in their ordinary domiciliary account.

Part of the circular read, “These changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of diaspora remittances in Nigeria.

“In addition, these changes would help finance streams of investment opportunities for Nigerians in diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows.

“All authorised dealers and the general public should note that beneficiaries shall have unfettered access and utilisation to such foreign currency proceeds, either in cash and/or in their domiciliary accounts, in line with our circular TED/FEM/FPC/GEN/01/010.”

Meanwhile the naira closed on Monday November 30, 2020 at between N508 and N510/$
in the black market over persistent forex demand and speculative purchases.

Earlier in the day, the naira fell to N500 to the dollar after the Central Bank of Nigeria (CBN) adjusted the exchange rate by 3 percent across foreign exchange market segments.

The Central Bank of Nigeria (CBN) has however amended its foreign exchange rule by announcing that beneficiaries of diaspora remittances through the international monetary transfer operators (IMTO) shall now have such inflows in foreign currency (US Dollar) through the designated bank of their choice.

The persistent depreciation in the value of the naira is due to an increase in demand for the dollar by the end-users amid a shortage of the greenback.