Forex: CBN issues further directives to DMBs, permits $10,000 withdrawals

*The Central Bank of Nigeria explains these policy changes aim to promote transparency, liquidity, and price discovery in the Forex market towards improving Forex (FX) supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market

Isola Moses | ConsumerConnect

In line with the Central Bank of Nigeria (CBN) earlier statement of June 14, 2023, on new guidelines in the foreign exchange (Forex) market, the Bank says it held an extraordinary Bankers’ Committee meeting Friday, June 16, 2023, to discuss its implementation and implications for the banking public.

The Bankers’ Bank explained these policy changes aim to promote transparency, liquidity and price discovery in the FX market in order to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market.

Dr. Abdulmumin Isa, Acting Director of Corporate Communications at CBN, noted that in line with deliberations at the meeting, the Committee provided further guidance to Deposit Money Banks (DMBs) as follows:

1. All visible and invisible transactions (medicals, school fees, BTA/PTA, airline and other remittances) are eligible for the Investors’ and Exporters’ (I & E) window.
2. DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window.
3. 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 USD$ 10,000 per day or its equivalent via telegraphic transfer. DMBs shall provide returns to the CBN, including the “purpose” for such transactions.
4. 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.
5. The CBN will prioritize orderly settlement of any committed FX forward transactions as they fall due in order to boost market confidence further.
6. The Bank will normalise its CRR maintenance processes and ensure equity in its implementation across the banking industry.

The CBN will continue to engage stakeholders and issue further guidance as it implements the ongoing reforms.