JUST IN: CBN Gives Nigerians Options To Convert Diaspora Remittances To Naira

…Naira Drops To N808 Per Dollar

The Central Bank of Nigeria has added naira and the eNaira as payment options for diaspora remittances.

The CBN announced the policy on Wednesday in a circular dated July 10, 2023, seen by THE WHISTLER.

The CBN said, “Further to the circular referenced ED/FEM/FPC/GEN/01/011 dated November 30, 2020 in respect of the above subject, the Central Bank of Nigeria-hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.

“Accordingly, all recipients of diaspora remittances through the CBN-approved IIVITOs on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and eNaira as payout options.

“For the avoidance of doubt, International Money Transfer Operators are required to pay out the proceeds using the Investors’ & Exporters’ Window rate as the anchor rate on the day of the transaction.”

Prior to the decision, the CBN had in 2020 in a circular referenced ED/FEM/FPC/GEN/01/011 announced dollars as payment for diaspora remittances.

The move was to allow foreign exchange to pass through the official banking channels as most Nigerians had bypassed the banking system to exchange at the black market which offered a higher premium.

Such recipients of remittances were given the option of receiving funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.

CBN had said, “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.

“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. “

Meanwhile, the naira on Wednesday depreciated to N808 against the dollar.

Data obtained from Abokifx shows the naira plunged from N800 per dollar traded on Tuesday to N808.

By implication, the naira depreciated by N8 at the close of trade.

Recall that Bank of America had earlier said that the naira is underpriced, adding that since the floating of the currency, the naira is undervalued by 12 per cent.

The naira was floated by the (CBN) at the directive of President Bola Tinubu as a measure to harmonise the exchange rate windows.

The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe in a statement on Wednesday expressed dissatisfaction with the new exchange rate policy by the CBN

He noted that the foreign exchange market remains volatile because BDCs are excluded from the I&E window.

Gwadebe said the high exchange rate disparity of about N30 between the I&E window and the parallel market, has negatively affected liquidity in the foreign exchange market.

He said, “The forex market is not competitive because of the limited number of participants. Another issue is the liquidity and then the legislation, which is not including the BDCs, to be part of the forex market”.