In order to bridge the wide exchange rate between the legalised foreign exchange (forex) markets and the parallel market, the Central Bank of Nigeria (CBN) has said beneficiaries of funds sent into the country from international sources can now withdraw them in the same currency.
Before now, it was difficult for those in Nigeria to withdraw their funds in cash in foreign currencies because of the shortage of FX in the system.
This has given room for speculators in the black market to have a field day, causing the value of the local currency to weaken sharply.
Over the weekend, the Naira dropped to over 24-month lows of N500 to a Dollar and this was a source of worry for the apex bank, which has struggled to unify the exchange rates of the various segments.
On Monday, the CBN issued a circular, informing the authorised forex dealers and members of the public that beneficiaries of diaspora remittances can now receive their funds in cash. The central bank said the beneficiaries have the options of collecting the funds in foreign currencies or have them transferred to their domiciliary accounts.
What this means is that the banks or the International Money Transfer Operators (IMTOs) like the Western Union, Money Gram and others will not have to first convert the FX inflows into Naira before handing over the funds to the beneficiaries.
In the circular, the CBN explained that this new policy was part of its effort to “liberalise, simplify and improve the receipt and administration of diaspora remittances into Nigeria.”
The apex bank further said the latest development was “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 receipts 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,” the circular signed by the Director of Trade and Exchange Department of the CBN, Mrs Ozoemena Nnaji, said.
– Business Post