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The CBN updates the foreign exchange market and removes the restriction

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The Central Bank of Nigeria, CBN, has announced further policy changes.

According to the Director of Corporate Communications, Dr Isa AbdulMumin, the policy changes are aimed at promoting transparency, liquidity and price discovery in the FX market.

AbdulMumin said this is to improve FX supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market.

He said that in line with deliberations at an extraordinary Bankers’ Committee meeting held on June 16, the CBN provided further guidance to Deposit Money Banks (DMBs) as follows:

“All visible and invisible transactions (medicals, school fees, BTA/PTA, airline and other remittances) are eligible for the Investors’ and Exporters’ (I & E) window.

“DMBs shall ensure expeditious processing of all eligible invisible transactions on behalf of their customers using the applicable rate at the I & E window.

“Ordinary domiciliary account holders shall have unfettered and unrestricted access to funds in their accounts.

“Domiciliary account holders are permitted to utilise cash deposits not exceeding 10,000 dollars per day or its equivalent via telegraphic transfer,” he said.

The CBN spokesman said that the DMBs are mandated to provide returns to the CBN, including the “purpose” for such transactions.

He added that cash deposits into domiciliary accounts would not be restricted, subject to due diligence by DMBs conducting proper Know Your Customer (KYC).

“The CBN will prioritise the orderly settlement of any committed FX forward transactions as they fall due to boost market confidence further.

“The Bank will normalise its Cash Reserve Ratio (CRR) maintenance processes and ensure equity in
its implementation across the banking industry,” he assured.

He added that the apex bank would continue to engage stakeholders and issue further guidance as it implements the ongoing reforms.

On Wednesday last week, CBN announced removing the foreign exchange cap to allow banks to trade the Naira against the US dollar freely.

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