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CBN latest policy on diaspora remittance kicks off tomorrow

CBN’s latest policy on receipt and administration of diaspora remittances into Nigeria is set to kick off tomorrow.

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The Central Bank of Nigeria has announced that its recent policy on receipt and administration of diaspora remittances into Nigeria is set to kick off tomorrow, December 4, 2020.

This is according to a press release issued by the apex bank today.

The announcement became imperative after consultations and engagements with relevant stakeholders over smooth implementation of the recent policy, which is aimed at providing a more convenient channel for Nigerians in Diaspora to remit funds back to Nigeria.

What they are saying

Commenting on the recent development, the Governor of Central Bank of Nigeria, Godwin Emefiele said:

“In the course of following up on the implementation of the aforementioned new policies, the CBN observed some pushback by some of the IMTOs, which were bent on undermining the new policies. This was the reason the CBN had to insist on Wednesday, December 2, 2020, that all DMBs must close all Naira General Ledgers through which the Naira remittances were being carried out.

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“Following the announcement of these new policy measures, the Central Bank of Nigeria, in an effort to enable smooth implementation, engaged with the commercial banks and the IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice.

“As a result of these engagements, which took place with major IMTOs and the DMBs today, Thursday, December 3, 2020, the stakeholders have committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020.

“I therefore seize this opportunity to announce to Nigerians both at home and in the diaspora, that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, MoneyGram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020.”

What you should know

The recent policy as earlier reported by Nairametrics, requires banks to transfer all diaspora remittances to the domiciliary accounts of the beneficiaries or pay the customers in foreign currency.

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  • This is in contrast to the previous policy, where inflow through IMTOs such as Western Union was paid to beneficiaries in Naira.
  • In lieu of this, the Central Bank of Nigeria had instructed DMBs to close all Naira ledger accounts opened specifically for the purpose of receiving IMTO (foreign transfers from diaspora Nigerians) with immediate effect.

Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

2 Comments

2 Comments

  1. OLADIRAN LAWOYE

    December 9, 2020 at 9:10 am

    There is no logical reason why recipients cannot and should not be able to receive their money in Naira, the country’s LEGITIMATE currency. Does any of Nigerian Bank even have one thousandth of the foreign currencies required. This gesture is CERTAINLY NOT to help, BUT to make life impossible for their fellow citizens. THIS FURTHER SHOWS THAT BLACKS GENERALLY ARE THE MOST EVIL RACE IN THE WORLD, AND THEIR OWN WORST ENEMY, ESPECIALLY NIGERIAN POLITICIANS. CERTAINLY, Western Union, Money Gram, etc., would NEVER, for this reason, start sending remittances in Pounds Sterling, Dollars, Euros, and so on!

    • Ian

      December 16, 2020 at 7:13 pm

      Remitly, WorldRemit, and RiaMoney have successfully set up their systems to transfer USD cash.
      And no, these international money transfer companies don’t have any shortage whatsoever of USD cash. It’s my understanding that Western Union and Money Gram as larger, behemoth, and by implication, slower organisations, are still in the process of configuring their systems for this but will hopefully get there soon.

      They’re literally awash with dollars. Please note that, as per existing regulations, deposit money banks are not allowed to do the remittances business.

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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.

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Dollar, Exchange rate, FOREX, NAFEX market turnover drop by 59%, Naira crashes to N470/$1 as currency uncertainty worsens 

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.

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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

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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.

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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

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Naira falls across forex markets as businesses resume after public holidays

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.

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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.

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  • 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.

Continue Reading

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

on

Naira falls across forex markets as businesses resume after public holidays

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.

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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

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  • 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.

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