Analysts at FBNQuest Research have expressed support for the Central Bank of Nigeria (CBN)’s extension of its “Naira 4 dollar scheme,” stating that a strong recovery in remittance into the country would ease pressure on the naira ex-change rate and current account.
In a bid to incentivise the inflow of diaspora remittances and boost the external reserves, CBN in early March, introduced “Naira 4 dollar scheme,” under which recipients of diaspora remittances are paid N5 for every $1 received. The scheme commenced on March 8 and was initially slated to expire on May 8, but the apex bank recently announced that it had extended the scheme until further notice.
Commenting on CBN’s extension of the scheme in a note obtained by New Telegraph yesterday, the FBNQuest Research analysts pointed out that some other developing countries such as Bangladesh and Pakistan, had also introduced measures to boost the inflow of diaspora remittances.
The analysts stated: “CBN has extended its ‘Naira 4 dollar scheme’ until further notice and will be hoping for a strong recovery in remittances and, therefore, an easing of pressure on the naira exchange rate and the current account. The COVID- 19 virus was widely seen as very damaging to remittances. “Some countries have enjoyed an increase, notably Bangladesh and Pakistan. Both have posted y/y double-digit growth every month since June.
– New Telegraph