Dear Nairalanders,

One does not exactly understand the policies of our present CBN as it relates to foreign currencies and transactions.

First CBN came up with no foreign currency payment for any transaction done in Nigeria. This means you buy goods in foreign currency but sell and get paid in Naira. It means you would need to buy foreign currency from the CBN if you are shipping through LC or from the black market rate if transaction is not valid for forex to be able to purchase new goods or pay for the one you already purchased (Note that for your transaction to be valid for LC, you must have the amount of the goods in your bank and bank will freeze this amount until shipment is made and they then transfer the amount based on CBN rate to your vendor)

Last week, CBN came up with a new policy that you must have money in your account before you can open form m for non valid forex transactions. How this would work is what I do not know because if a business man has all the money to pay at once, then there is no need for non valid forex transaction. The essence of the non valid forex transaction is that you are expecting payment or hopeful money is coming from somewhere so long as you can get credit facility from your vendor and she/he is willing to ship why you pay later. In this case now, since you are not allowed to source forex from CBN because your shipment is not valid for forex, the only means of sourcing hard currency is through the black market rate.

This week CBN came with the policy of not allowing anybody pay in foreign currency in his/her domiciliary account. This is where I get confused because the only way one can source dollar and pay for foreign transactions that are not valid for forex is the black market and now you are not allowed to pay in that dollar into your account. How does one pay up transactions that have been carried out already under non valid for forex since CBN won't sell to you and you are not permitted to pay in cash yourself?

Again, I asked my bank in a situation you have a credit facility from your vendor (which Bank agree that they can use to process your form m for shipment). In this case, transaction is not valid for forex as you do not that the money in your account but your vendor is agreeing to ship to you while you pay later so CBN cannot sell dollar to you to pay your vendor and you are still not allowed to source dollar yourself and pay into your account to enable you pay your vendor and at the same time you can only get paid for that transaction in Naira when you sell, how does CBN expect you to pay your vendor?

I really need contribution /answers to these issues as I am really cracking my head on how to continue doing business in this country. Presently, I am no longer accepting Purchase orders from companies because I do not know how am going to pay for the goods when they are shipped and I sell. Paying off already purchased goods is a problem now as one can no longer pay in dollar and CBN cannot sell to you because transaction was carried out under not valid for forex and this am afraid may hamper my relationship with my foreign partners. If this continues, how can one continue to pay staff salaries when you are no longer carrying out any business?

Answers pls and whoever is in a position to reach CBN should contact them for answers to these issues.

Thanks All.

I need to stae clearly that i am in fuill support of the stringent measures CBN has adopted to strenghten the Naira.

Have you asked yourself why the dollar has remained stable in the exchange market. Bank rate since may has not exceeded 199.8 and the parallel market has hit 242 lately. its nothing but speculative panic which will climax and come back crumbling.

The current rise is only in the parallel market otherwise known as black market. The federal government of Nigeria is making mad money from this policy and trust me there will be no reversals.

we have dollarised our economy and inflation is hiting us hard.

in simple terms, what CBN is saying is do the right thing. The policies have been in place for FX transactions but we like cutting corners.

prior to this policy, Nigeria lost billions daily and banks in partnership with the customers transfered funds to all parts of the world for personal and commercial businesses.

The CBN policy stipulates that you use FORM A and FORM M for vissible and invissible transactions.

There is no plan to reverse that policy Emefiele and his board are working and have the support of mr President. Brace up and do the right thing. Our foreign reserve is rising there is no going back.

Banks are shoting their doors against FX deposits because the cost of managing it will tell on their books.

we are strickly back to FORM A and FORM M.

@Lalasticlala

Hmmm...

Built2last:
I need to stae clearly that i am in fuill support of the stringent measures CBN has adopted to strenghten the Naira.

Have you asked yourself why the dollar has remained stable in the exchange market. Bank rate since may has not exceeded 199.8 and the parallel market has hit 242 lately. its nothing but speculative panic which will climax and come back crumbling.

The current rise is only in the parallel market otherwise known as black market. The federal government of Nigeria is making mad money from this policy and trust me there will be no reversals.

we have dollarised our economy and inflation is hiting us hard.

in simple terms, what CBN is saying is do the right thing. The policies have been in place for FX transactions but we like cutting corners.

prior to this policy, Nigeria lost billions daily and banks in partnership with the customers transfered funds to all parts of the world for personal and commercial businesses.

The CBN policy stipulates that you use FORM A and FORM M for vissible and invissible transactions.

There is no plan to reverse that policy Emefiele and his board are working and have the support of mr President. Brace up and do the right thing. Our foreign reserve is rising there is no going back.

Banks are shoting their doors against FX deposits because the cost of managing it will tell on their books.

we are strickly back to FORM A and FORM M.

@Lalasticlala

Thank you guy, pls expanciate more on the process of form M, as am planning to ship into the country some factory equipments from Europe, please step by step explain, I have equivalent naira that worthy the purchase in my account

can dollar be withdraw from domicilary account and collected it in Naira since there is new policy. l just want to be sure.