Latest Announcement from CBN: Removal of Restrictions and Key Developments in Foreign Exchange Market

The Central Bank of Nigeria (CBN) has recently revealed additional policy adjustments. Dr Isa AbdulMumin, the Director of Corporate Communications, stated that these policy changes have been implemented to foster transparency, liquidity, and price discovery in the foreign exchange (FX) market.

The primary goals of these modifications, according to AbdulMumin, are to enhance the availability of FX, discourage speculative activities, boost customer confidence, and ensure overall stability in the FX market.

Based on the discussions held during an extraordinary meeting of the Bankers’ Committee on June 16, the CBN has issued further directives to Deposit Money Banks (DMBs) for their guidance.

“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 utilise cash deposits not exceeding 10,000 dollars per day or its equivalent via telegraphic transfer,” he said.

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According to the spokesperson of the Central Bank of Nigeria (CBN), DMBs have been instructed to submit reports to the CBN, which should include the purpose of the transactions.

The spokesperson also mentioned that there would be no limitations on cash deposits into domiciliary accounts as long as the DMBs adhere to the necessary Know Your Customer (KYC) procedures and conduct proper due diligence.

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

He assured that “the Bank will normalise its Cash Reserve Ratio (CRR) maintenance processes and ensure equity in
its implementation across the banking industry”.

Additionally, he stated that the Central Bank would maintain its active involvement with stakeholders and provide them with additional instructions as it progresses with the ongoing reforms.

Last week, on Wednesday, the CBN announced the removal of the foreign exchange cap. This action permits banks to trade the Naira against the US dollar freely.