
Court suspends Mareva injunction, orders opening of Seplat’s corporate offices

Buhari directs FIRS, others to ensure strict compliance of tax payment by foreign firms

Google threatens to remove its search engine from Australia due to media code

Flour Mills moves to diversify funding sources with N29.8 billion bond listing

Renewable energy critical driver of Africa’s post-COVID-19 recovery and prosperity

Nigeria records $4.3 billion in Corporate Deals in 2020

Buhari orders MDAs to grant FIRS access to their systems

Naira gains marginally at NAFEX window, exchange rate to remain stable

CBN has disbursed N14.35 billion to DisCos for meter procurement – FG

Investors get burnt, lose $1.6 billion in crypto within a day
Currencies
CBN issues subtle warning explaining how domiciliary accounts should be used
The CBN has issued a new circular explaining how domiciliary accounts should be used.

Published
2 months agoon

The Central Bank of Nigeria (CBN) issued a circular on Monday clarifying how domiciliary accounts will be operated in the country. According to the CBN, domiciliary accounts used to deposits export proceeds (inflow from exports of goods and services from Nigeria) can only be used for business operations.
The directive also allows any extra funds remaining in the domiciliary accounts to be sold in the Investors and Exporters (I&E) Window, suggesting that the CBN is warning exporters not to sell their foreign proceeds in the black market.
This disclosure was made in a circular dated November 30, 2020, issued by CBN to all authorized dealers and the general public and signed by its Director for Trade & Exchange Department, Dr O.S. Nnaji.
On Export Proceeds
‘These accounts will continue to be operated based on existing regulations which allow account holders use of their funds for business operations only, with any extra funds sold in the Investors & Exporters window.’’
On other domiciliary accounts
“Where accounts are funded by electronic/wire transfer, account holders will be allowed unfettered and unrestricted use of these funds for eligible transactions. Where accounts are funded by cash lodgments, the existing regulations will continue to apply.”
The CBN also claimed it was issuing these clarifications in view of its “vastly improved capabilities of the CBN to monitor transactions, forestall money laundering and prevent the adverse effect of dollarization in Nigeria’s economy” which the CBN has frowned upon for years.
The CBN’s statement also alluded to the use of BVN in tracking compliance with its guidelines.
What this means
The latest regulations from the CBN appears to be directed at clarifying widespread information that there are plans for a clampdown of domiciliary accounts.
- For export proceeds, this circular appears to be warning exporters to use their forex proceeds for “legitimate” transactions and sell the rest in the I&E window instead of selling it in the black market.
- On Domiciliary accounts, the CBN is basically saying that inflows through electronic wires will be allowed for use by Nigerians for transactions deemed eligible. This means, if you received a foreign transfer into your account, you can use it to pay for transactions such as e-commerce payments or transfers to anyone at any time.
- However, for dollar cash deposits into your accounts, the central bank is reiterating that there will be restrictions on how that money used such as restricting it from direct transfers or even using it to pay for e-commerce transactions. These rules have existed for some time.
- Currently, a limit of $10,000 applies when you want to utilize foreign currency cash deposits.
- The central bank is basically dissuading the black market purchase of forex by limiting the number of dollars that can be purchased on the streets where forex is sold in the black market. However, the majority of black market transactions, particularly in dollar value are traded using wired transfers.
Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]


4 Comments
Leave a Reply
Cancel reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Currencies
Naira gains marginally at NAFEX window, exchange rate to remain stable
The exchange rate between the naira and the dollar appreciated closing at N394/$1 at the NAFEX window.

Published
10 hours agoon
January 22, 2021
On January 21, 2021, the exchange rate between the naira and the dollar appreciated closing at N394/$1 at the NAFEX (I&E Window) where forex is traded officially.
However, during intraday trading, the exchange rate traded for as high as N415.76/$1, sustaining yesterday’s figure which is the highest intraday trading tracked by Nairametrics. Forex turnover, however, dropped by about 14% as pressure on the foreign exchange market continues.
READ: Naira stabilizes at black market as external reserve rises by $515 million in 12 days
According to a report from Reuters, the naira is expected to remain stable in the coming week as currency traders watch for policy details at CBN’s first MPC meeting in 2021.
Also, the exchange rate at the black market where forex traded unofficially still remained flat at N475/$1. The exchange rate at the parallel market closed at N475/$1 on the previous trading day of January 20, 2021.
The exchange rate disparity between the parallel market and the official market is about N81, representing a 17% devaluation differential.
READ: Naira strengthens at NAFEX window despite 38% drop in dollar supply
The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N394/$1. This represents a 17 kobo gain when compared to the N394.17/$1 that it closed on the previous trading day.
- The opening indicative rate was N394.16 to a dollar on Thursday, the same rate that was recorded on Tuesday, January 20, 2021.
- The N415.76 to a dollar was the highest rate during intra-day trading before it closed at N394 to a dollar. It also sold for as low as N390/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window dropped by 13.9% on Thursday, January 21, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover declined from $89.50 million on Wednesday, January 20, 2021, to $77.04 million on Thursday, January 21, 2021.
- The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
- There are fears that the exchange rate at the black market might be under pressure in the coming weeks as importers scramble for dollars to meet their demands.
READ: The dangling fate of indigenous oil upstream operators
Oil price steady rise
Brent crude oil price is at about $56 per barrel on Wednesday, as it moves towards the $60 mark, a strong sign that global demand could sustain price increases in 2021.
- This appears as a boost to Nigeria as the country’s crude oil price benchmark for 2020 was $40 while it projected an oil production output of 1.8 million barrels per day.
- Nigeria has a production capacity of 2.5 million barrels per day but is subject to OPEC’s crude oil production cuts, which are expected to help sustain higher oil prices.
- The higher oil prices and steady production output have positively impacted Nigeria’s external reserves, rising sharply to $36.304 million according to central bank data dated January 14, 2020.
- This is the highest level since July 2020 and a sign that higher oil prices and steady output levels may be contributing significantly to Nigeria’s foreign exchange position.
READ: Nigeria faces prolonged exchange rate crisis as oil prices remain stuck at $40
Nigeria rising external reserves
- The external reserve has risen to $36.464 billion as of January 19, 2021.
- Nairametrics reported on Wednesday that the government may have taken receipt of the $1-1.5 billion World Bank Loan.
- The external reserves have increased by $1.09 billion since December 31, 2020, when it closed the year at $35.3 billion.
- Nigeria also needs the external reserves to hit $40 billion if it is to adequately meet some of the pent up demand that has piled up since 2020 when oil prices crashed and the pandemic caused major economic lockdowns.
Currencies
Official (NAFEX) Exchange rate hits N415/$1 during Intra-day trading
The exchange rate at NAFEX trades at N415/$1 during Intra-day trading NAFEX as forex turnover rises by 233% rise

Published
1 day agoon
January 21, 2021
On January 20, 2021, the exchange rate between the naira and the dollar depreciated closing at N394.17/$1 at the NAFEX (I&E Window) where forex is traded officially.
However, during intraday trading, the exchange rate traded for as high as N415.76/$1 the highest intraday trading tracked by Nairametrics. Forex turnover also rose significantly by 233.6% as demand puts pressure on the foreign exchange market.
On the flip side, the exchange rate at the black market where forex traded unofficially still remained stable at N475/$1. The exchange rate at the parallel market closed at N475/$1 on the previous trading day of January 19, 2021.
READ: Naira strengthens at NAFEX window despite 61% drop in dollar supply
The exchange rate disparity between the parallel market and the official market is about N80.83, representing a 17% devaluation differential.
The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N394.17/$1. This represents an 82 kobo gain when compared to the N393.35/$1 that it closed on the previous trading day.
READ: FIRS hits 98% of target as it collects N4.95 trillion for 2020 fiscal year
- The opening indicative rate was N394.17 to a dollar on Wednesday, representing a 21 kobo drop when compared to the N393.96 that was recorded on Tuesday, January 19, 2021.
- The N415.76 to a dollar was the highest rate during intra-day trading before it closed at N394.17 to a dollar. It also sold for as low as N390/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window increased significantly by 233.6% on Wednesday, January 20, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover rose from $26.83 million on Tuesday, January 19, 2021, to $89.50 million on Wednesday, January 20, 2021.
- The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
- The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
- There are fears that the exchange rate at the black market might be under pressure in the coming weeks as importers scramble for dollars to meet their demands.
READ: Naira falls at black market despite over 100% improvement in dollar supply
Oil price steady rise
Brent crude oil price is at about $56 per barrel on Wednesday, as it moves towards the $60 mark, a strong sign that global demand could sustain price increases in 2021.
- This appears as a boost to Nigeria as the country’s crude oil price benchmark for 2020 was $40 while it projected an oil production output of 1.8 million barrels per day.
- Nigeria has a production capacity of 2.5 million barrels per day but is subject to OPEC’s crude oil production cuts, which are expected to help sustain higher oil prices.
- The higher oil prices and steady production output have positively impacted Nigeria’s external reserves, rising sharply to $36.304 million according to central bank data dated January 14, 2020.
- This is the highest level since July 2020 and a sign that higher oil prices and steady output levels may be contributing significantly to Nigeria’s foreign exchange position.
READ: Naira falls at NAFEX window despite 56.6% improvement in dollar supply
Nigeria rising external reserves
- The external reserve has risen to $36.464 billion as of January 19, 2021.
- Nairametrics reported on Wednesday that the government may have taken receipt of the $1-1.5 billion World Bank Loan.
- The external reserves have increased by $1.09 billion since December 31, 2020, when it closed the year at $35.3 billion.
- Nigeria also needs the external reserves to hit $40 billion if it is to adequately meet some of the pent up demand that has piled up since 2020 when oil prices crashed and the pandemic caused major economic lockdowns.
Currencies
Naira strengthens at NAFEX window despite 61% drop in dollar supply
The exchange rate between the naira and the dollar appreciated marginally closing at N393.35/$1.

Published
2 days agoon
January 20, 2021
On January 19, 2021, the exchange rate between the naira and the dollar appreciated marginally closing at N393.35/$1 at the NAFEX (I&E Window) where forex is traded officially.
This is as dollar supply dropped by 61% with lower demand.
Also, the exchange rate at the black market where forex traded unofficially maintained stability at N475/$1. The exchange rate at the parallel market closed at N475/$1 on the previous trading day of January 18, 2021.
READ: Nigeria: Pressure on FX to continue in 2021 – Report
This is as the Central Bank of Nigeria sustains its intervention across the foreign exchange markets to meet the needs of manufacturers and end-users who need dollars for their medical trips, school fees payments, travel allowances, and others.
The apex bank has also resumed its dollar sales to Bureau De Change operators.
The exchange rate disparity between the parallel market and the official market is about N81.65, representing a 17.2% devaluation differential.
The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N393.35/$1. This represents a 48 kobo gain when compared to the N393.83/$1 that it closed on the previous trading day.
READ: Nigeria faces prolonged exchange rate crisis as oil prices remain stuck at $40
- The opening indicative rate was N393.96 to a dollar on Tuesday, representing an 11 kobo gain when compared to the N394.07 that was recorded on Monday, January 18, 2021.
- The N396 to a dollar was the highest rate during intra-day trading before it closed at N393.35 to a dollar. It also sold for as low as N390/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window declined by 61% on Tuesday, January 19, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover dropped from $69 million on Monday, January 18, 2021, to $26.83 million on Tuesday, January 19, 2021.
- The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
- The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
- There are fears that the exchange rate at the black market might be under pressure in the coming weeks as importers scramble for dollars to meet their demands.
READ: Naira falls at black market despite over 100% improvement in dollar supply
Oil price steady rise
Brent crude oil price is currently at $54.88 per barrel on Monday, as it moves towards the $60 mark, a strong sign that global demand could sustain price increases in 2021.
- Nigeria’s crude oil price benchmark for 2020 was $40 while it projected an oil production output of 1.8 million barrels per day.
- Nigeria has a production capacity of 2.5 million barrels per day but is subject to OPEC’s crude oil production cuts, which are expected to help sustain higher oil prices.
- The higher oil prices and steady production output have positively impacted Nigeria’s external reserves, rising sharply to $36.304 million according to central bank data dated January 14, 2020.
- This is the highest level since July 2020 and a sign that higher oil prices and steady output levels may be contributing significantly to Nigeria’s foreign exchange position.
READ: A summer of higher food prices, limited room for monetary policy
Nigeria rising external reserves
- The external reserve has risen to $36.3 billion as of January 15, 2021, suggesting that the government may have taken receipt of the $1-1.5 billion World Bank Loan.
- The external reserves have increased by $1 billion since December 31, 2020, when it closed the year at $35.3 billion.
- The unification of the exchange rate was previously cited as a major requirement for receiving the world bank facility.
- Nigeria needs the external reserves to hit $40 billion if it is to adequately meet some of the pent up demand that has piled up since 2020 when oil prices crashed and the pandemic caused major economic lockdowns.
-
Get the scoops and market intelligence that can help
you make better investment decisions right in your
mailbox.
Anonymous
November 30, 2020 at 8:22 pm
I didn’t understand nothing here
Mansur
November 30, 2020 at 10:16 pm
Thanks
Chuke Arah Jr
December 1, 2020 at 3:48 am
How would this directive apply to a Gift Draft/Cashier’s U$D Check, sent to me from the US? Can I deposit the check into my dormiciliary Account, to be cleared by my bank, and then released to me for my personal use? Thanks
Anonymous
December 6, 2020 at 1:15 am
Does it mean you can’t get a direct deposit from America if you don’t have a domiciliary account