Determined to save the local currency, the Naira, by all means and reduced persistent foreign exchange scarcity in the market, CBN now allows diaspora remittances to be withdrawn dollar cash and sold anywhere, including the black market, according to a circular released Monday
Some analysts see the development as part of the despe
rate moves by the regulator to reduce the volatility in the market typified by the widening rate gap between the official and parallel markets.
This is even as the local currency has been experiencing poor outing against other foreign currencies like the dollar now exchanging N500/$ (parallel market) compared to N395/$ at the official BDC market, with external reserves being low at ($35.43bn)
Part of the circular on, Monday, November 30, 2020, to all authorized dealers and the general public and signed by its Director for Trade and Exchange Department, Dr O.S. Nnaji reads:
‘’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) or into their ordinary domiciliary account. Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.’’
According to CBN 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.
The apex bank also points out that 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.
Nigeria receives an average of $5 billion per quarter in foreign remittances but suffered a sharp drop in the second quarter of 2020 when it fell to $3.38 billion.
