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CBN boosts dollar supply with new rules on accounts, remittance

In an apparent move to boost dollar supply into the economy, the Central Bank of Nigeria (CBN) yesterday introduced new rules that allow beneficiaries of diaspora remittance and transfers into domiciliary accounts to receive their money in foreign currency. Previously, beneficiaries of diaspora remittance can only receive in cash the naira equivalent of the amount transferred. Also foreign currency cash withdrawal from domiciliary accounts was restricted to money paid into such accounts by cash lodgements.

Announcing the policy change yesterday, CBN’s Director, Trade and Exchange Department, Dr. O Nnaji, said the new rules were to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, as well as  to ensure the stability of the foreign exchange market. He said the removal was also consequent on the improved capabilities of the apex bank to monitor transactions, forestall money laundering and prevent the adverse effect of dollarization in the  economy. He stated this in two circulars  to authorised dealers and the general public,  titled, “Amendment to procedures for Receipt Of Diaspora Remittance”, and Operations of Domiciliary  Account. He said: “In an effort to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, the Central Bank of Nigeria (CBN) wishes to announce as follows. “Beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) through the designated bank of their choice. “Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account. “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 of remittances would receive a market reflective exchange rate for their inflows. ‘All Authorized Dealers and the general public should note that beneficiaries shall have unfettered access and utilization 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. Please ensure strict compliance and be guided accordingly.”