CBN To Continue Naira 4 Dollar Scheme Indefinitely
The Central Bank of Nigeria is planning on extending its Naira 4 dollar initiative amid increasing demand for foreign exchange to meet the bank’s obligation.
The development was contained in the communique 140 released by the apex bank.
The Naira 4 dollar scheme was first introduced on March 5, with a termination date of May 8, with the agenda of expanding Nigeria’s foreign exchange sources.
The apex bank however extended the policy till further notice in a memo by Saleh Jibrin, Director of Trade and Exchange Department, addressed to Deposit Money Banks, International Money Transfer Operators (IMTOs) and the Nigerian public.
The scheme offers N4 reward to beneficiaries of remittances with N5 for every $1 of remittance sent through official channel.
The beneficiaries also have options to receive the remittances in the currency of their choice.
The CBN said in a report that remittances grew by 10 per cent from the $12.9bn by September 2020 to $14.2bn between January to September.
The CBN said, “On the exchange rate, the Committee applauded the Management’s efforts at maintaining stability over the short term with increasing demand as the economy continues to reopen.
“The MPC welcomed the improvement in foreign capital inflow through diaspora remittances and urged the Bank to further extend the incentive scope to attract more remittances to official channels.”
The naira is still faced with undue pressure to be devalued due to shortage of forex.
The naira has devalued to N415.83 from the N380 per dollar held before the policy was introduced.
It was first devalued in May from N380 to N411 along the rates held at the Investors’ and Exporters Window (I&E).
But the bank said another problem it is faced is the plunge in oil proceeds despite the rise in crude oil prices.
Crude oil prices as of Wednesday is trading above $80 dollar per barrel. Brent Crude is trading at $88.96 per barrel, while Nigeria’s Bonny Light is trading at $88.31.
The bank said, “Members noted the dwindling proceeds from oil sale, despite rising crude oil prices.
“The improved foreign exchange supply will thus support the Bank’s demand management strategy in the foreign exchange market and consolidate macroeconomic performance, especially those that promote export, reduce dependence on import and reduce foreign exchange demand pressure.”