The Central Bank of Nigeria (CBN) has introduced new guidelines and policy changes in the Foreign Exchange (FX) market to promote transparency, liquidity, and price discovery. The Director of Corporate Communications, Dr. Isa AbdulMumin, revealed that these measures aim to improve FX supply, discourage speculation, boost customer confidence, and ensure overall stability in the FX market.
Following discussions at an extraordinary Bankers’ Committee meeting held on June 16, the CBN has provided further guidance to Deposit Money Banks (DMBs) regarding the implementation of these policy changes. Dr. AbdulMumin outlined the key directives as follows:
- All visible and invisible transactions, including medicals, school fees, BTA/PTA, airline and other remittances, are eligible for the Investors’ and Exporters’ (I&E) window.
- DMBs are required to expedite the processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I&E window.
- Ordinary domiciliary account holders will have unrestricted access to funds in their accounts.
- Domiciliary account holders are permitted to utilize cash deposits not exceeding $10,000 per day or its equivalent via telegraphic transfer.
To ensure compliance and transparency, DMBs are mandated to provide returns to the CBN, including the purpose of such transactions. However, cash deposits into domiciliary accounts will not be restricted, provided that DMBs adhere to proper Know Your Customer (KYC) and due diligence procedures.
The CBN spokesman also emphasized that the orderly settlement of any committed FX forward transactions will be prioritized to enhance market confidence. Furthermore, the CBN will normalize its Cash Reserve Ratio (CRR) maintenance processes and ensure equitable implementation across the banking industry.
Dr. AbdulMumin assured stakeholders that the CBN will continue to engage with them and issue further guidance as the ongoing reforms are implemented. These policy changes reflect the CBN’s commitment to fostering a transparent, stable, and efficient foreign exchange market in Nigeria.
