CBN Issues Further Guidelines On Foreign Exchange Market

The Central Bank of Nigeria (CBN) has issued additional guidelines on Operational Changes to the Foreign Exchange Market.

CBN’s Acting Director, Corporate Communications, Dr. Isa Abdulmumin, disclosed the development in a statement on Sunday, June 18, 2023.

He said, the decision was taken after an extraordinary Bankers’ Committee meeting on Friday, June 16, 2023, to discuss the implementation and implications of the earlier guidelines for the banking public.

The apex bank said, the policy changes aim to promote transparency, liquidity, and price discovery in the FX market to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market.

Dr. Abdulmumin said, the CBN, in line with deliberations at the meeting, provided further guidance to Deposit Money Banks (DMBs) as follows:

“All visible and invisible transactions (medicals, school fees, BTA/PTA, airline
and other remittances) are eligible for the Investors’ and Exporters’ (I & E) window.

“DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window.

“Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilize cash deposits not exceeding USD$ 10,000 per day or its equivalent via telegraphic transfer. DMBs shall provide returns to the CBN, including the “purpose” for such transactions.

“Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC, due diligence, and adhering to the spirit and letter of extant AML/CFT laws and other relevant rules and regulations.

“The CBN will prioritize orderly settlement of any committed FX forward
transactions as they fall due to boost market confidence further.

“The Bank will normalize its Credit Reserve Ratio (CRR) maintenance processes and ensure equity in its implementation across the banking industry”.

He said the CBN would continue to engage stakeholders and issue further guidance as it implements the ongoing reforms.

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