New CBN policy: Naira gains N20 again, exchanges N470/$

The Nigeria’s Naira is gaining heavily in the parallel market following the Central Bank of Nigeria (CBN) amendments to the foreign exchange rule on diaspora remittances.

The nation’s currency exchanged at N470/$ on Wednesday December 2, 2020, gaining yet another N20 in 24 hour.

The currency, which had closed at a four-year low of N510 on Monday, had firmed up and gained N20 on Tuesday December 1, 2020 against the dollar as it exchanged for N490/$ after the CBN relaxed the policy on foreign remittances and domiciliary accounts.

On Monday, the CBN said 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 apex bank in a statement on Monday November 30, 2020, signed by O.S. Nnaji, director of trade & exchange of CBN, said recipients of such remittances may have the option of receiving these funds in foreign currency cash or into their domiciliary account.

The CBN statement reads, “these changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of Diaspora remittances into Nigeria”.

“In addition, these changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients would receive a market reflective exchange rate for the market.”

The apex bank also noted that beneficiaries shall have unfettered access and utilisation to such foreign currency proceeds, either in cash and or in their domiciliary accounts.

Under the new guidelines, operators of export domiciliary accounts will continue to operate based on existing regulations which allow account holders use their funds for business operations only with any extra funds sold in the import and export window.

Also operators of ordinary domiciliary accounts where accounts are funded electronically or wire transfer would be allowed unfettered and unrestricted use of these funds for eligible transactions. And where accounts are funded by cash lodgments, existing regulation will continue to apply.

The CBN had on February 23, 2020, explained that only electronic fund transfers into Domiciliary accounts can also be transferred from such accounts while cash deposits into such accounts can only be withdrawn in cash also.

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  1. Looks like economic common sense is beginning to prevail. CBN has issued a directive that recipients of foreign money transfers can now receive in $ at this end.

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