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Nairaland Forum / Nairaland / General / Business / CBN Okays Withdrawals Of Dollars From Domiciliary Accounts (37483 Views)
BDCs Back CBN’s Directive Stopping Use Of Domiciliary Accounts As Collateral / CBN Lifts Restriction On Domiciliary Accounts, Allows $10k Withdrawals / FOREX: No Plan To Convert Domiciliary Accounts Into Naira - CBN (2) (3) (4)
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Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by teewaik: 6:57pm On Dec 01, 2020 |
By bank having enough forex. What the person meant is that will bank have enough dollars to meet up with the exceeding demand that the pressure from the payout will necessitate...Remember, there are backlogs of request and banks only pay based on the dollar they will get on a weekly basis from CBN... Studymore123: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Aflix(m): 6:57pm On Dec 01, 2020 |
thebosstrevor1:But we use American products, don't we ![]() |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by teewaik: 7:03pm On Dec 01, 2020 |
You are on point with your analysis...I was raising this point in nos 5 with a finance friend of mine today...Though there may be changes in the short run, maybe dollar falling by #10 or at most back to #470 from #500...The major factor determining our forex reserve is proceeds from sales of oil...With no significant change in that part(which am not seeing till next year)...I dont really see any significant adjustment occuring in the forex market, most especially the parallel market... bigtt76: 1 Like |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by teewaik: 7:12pm On Dec 01, 2020 |
Lol...Did you panicked sell?..Forex market dealing is not an easy thing...The person has to get the timing right...Some people now will be trying to panic sell cos of the new policy...not knowing in the long run, can it be sustained?... In September 7 when CBN resumed sales of forex to bdcs naira gained from 475 - 465...It was stable all though october...Do u now know that all those gains were wiped out in November when it rose to as high #500...Some people who were bullish held on to it that same September even despite the crash and gained in November.... However, naira stabilizing is what we all pray for... Neoteny: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by teewaik: 7:22pm On Dec 01, 2020 |
Hope you know CBN gives dollars to Bank on a Weekly basis and also to BDCs...But those guys in Banks are crooks too. Asides the backlogs they have nd have to pay.They do sell to those guys at parallel market rate, leaving customers request hanging.... I just hope CBN really enforces this PHIPEX: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Nobody: 7:24pm On Dec 01, 2020 |
Exactly what I’ve been saying . This is actually a trick to increase dollar inflow. There’s panic in the market now. People are rushing to sell because exchange is falling rapidly. Currently supply is higher. It’s an intentional move. Exactly what happened in September. It will still rise again. Today even the BDC guys in the market were not selling. They were all saying money no dey. But they’re happy to buy it at nothing from the desperate ones that don’t understand the market lol. These are just temporary vices. Cost of Dollar cannot remain reasonable until the economy starts to get better. Dollar rate suddenly dropping in recession is suspicious teewaik: 2 Likes |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Bluntemperor: 7:52pm On Dec 01, 2020 |
Johnrake69: I hear you! |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by vivaciousvivi(f): 7:57pm On Dec 01, 2020 |
ILoveDemMANNA:We can read. We don't require your copy and paste lecture Mr Manna BBQ 1 Like |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Nobody: 7:59pm On Dec 01, 2020 |
ILoveDemMANNA:Good, that means dollars would likely depreciate against the Naira. |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by BigBashiru: 8:02pm On Dec 01, 2020 |
SenecaTheYonger: While price of dollar denominated imports has gone up at the same time that your savings has gone down.... |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by SenecaTheYonger: 8:02pm On Dec 01, 2020 |
BigBashiru: Yep. Double suffering |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by erico2k2(m): 8:08pm On Dec 01, 2020 |
ILoveDemMANNA:And if the banks do not have enough dollars at the requested time? or you forget this money is wired electronically?? 1 Like |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 9:57pm On Dec 01, 2020 |
Exactly ...we all keep fingers crossed and watch what comes next ![]() teewaik: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Excellent7(m): 1:29am On Dec 02, 2020 |
This policy should have been in place long before now! The dollars will eventually end up in the parallel market thus improving the supply. I think it came quite late to be very effective in an easily visible manner. If not for Coronavirus travel restrictions on travel into Nigeria, it could have been more effective. However, I foresee some reduction in the rate of Naira fall against the dollar at least in the next 8-12 weeks. My prediction for USD: NGN is 500 plus or minus 50 NGN to USD. I am of the opinion that it could have surpassed 600 NGN per USD in this timeframe without this policy. Sometimes I wonder how our policy makers come to the decisions they announce. It seems to me that these guys are either ignorant or know the right thing to do but do not due to pecuniary or conflicting interests. Having said this, I will try to briefly highlight in a simple way the sources and evolution of this FOREX wahala specifically in the very recent past. The Naira is and will continue to be under pressure as long as we continue to import much more goods and services than we export. However, this can be mitigated in the short term by policies that encourage citizens and corporates to lodge and/or invest foreign currencies in the country (non-oil-based FOREX inflows). A long-term strategy would be to increase local production of goods and services and aggressive export drive. Imagine the FOREX savings that will accrue if every litre of fuel consumed locally is produced locally! In spite of these fundamental problems, ill-thought policies and policy summersaults have continually exacerbated the situation. Firstly, around 2015 (I stand to be corrected), under the guise of fighting corruption the government started making issues about foreign currencies in domiciliary accounts. The impression was that government might move to confiscate foreign currencies in these accounts and/or force them to be converted to Naira at fiat rates. At a point the banks even stopped receiving foreign currency deposits! Fortunately, the “madness” did not materialize but a lot of people had become cautious. Consequently, many Nigerians in Diaspora who often keep part of their income in the country as FOREX in domiciliary accounts became wary and so did other players. Secondly, the ban on beneficiaries of FOREX transfers receiving their payments in foreign currency but only in Naira together with the wide disparity in the exchange rates used by the banks in paying beneficiaries and parallel market rates (often in the range of 20-25% difference) ensured that in real terms the sender loses value (in the range of 20-25%) by making a transfer home as opposed to exchanging the funds at the parallel market. This and the continuous slide in Naira ensured that mostly “hot money” came from diaspora. By “hot money” I mean money for immediate and dire needs for family and dependents at home. The government is already banking on increased remittances from the diaspora during the festive period to help with the recession but I have had my doubts. The significant difference in rates is a dis-incentive. In my opinion the difference if any, between the bank rates and parallel market rates should not be more than 5%. 1 Like |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by visiontee(m): 3:31am On Dec 02, 2020 |
![]() lowkeybahdguy: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by PropertyBuying(f): 3:45am On Dec 02, 2020 |
BabaOwen:This is a good development. |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by teewaik: 4:06am On Dec 02, 2020 |
What some folks on this page failed to realize is that we are not a dollar nation, we dont print dollar..There is a limited stock of dollars, which CBN manages by allocating to the various sectors BDC & Banks on a weekly basis....The thing now is fine you will have dollar funds in your account or whatever IMTOs(Banks are the medium of withdrawal), and based on this new policy you are supposed to withdraw out cash...Then, what happens if the stock with banks cant meetup to the demand for dollar cash by individuals(There is no major change in forex reserve)...There dollar money get stucked and will be frustrated to collect in Naira or is it not when one is able to withdraw that you will then try to sell in the parallel market...Same emefiele was saying lastweek that Parallel market is an illegal market bla bla and people shouldn't patronise, yet a week after he is issuing policies which indirectly states that fine you can now withdraw and exchange your dollar at that same parallel market...I hope there isnt any sinister move behind this policy or just being desperate... bigtt76: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Neoteny(m): 4:23am On Dec 02, 2020 |
teewaik: Wasn't selling or trading. Bought another car, the money was wired to me, and when we went to GTB to withdraw dollars and pay the dealer i was told since it was an inflow i couldn't withdraw, and had to sell it to the bank at official exchange rates, which we know they'll turn around and sell to their BDC cohorts at black market rates. I didn't even know about that stupid policy. So in order to pay for the car I'd to take a hit as I didn't have enough money in my other accounts.
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Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by fid3fid: 6:02am On Dec 02, 2020 |
NwaAmaikpe: Some banks do accept cash dollar deposit for FCY transfers to oversea banks. While the notorious ones like UBA stopped FCY transfers. I wonder why CBN is strangling small businesses with this restriction on FCY transfer? If not for the Chinese remitters who have been helping exchange naira to RMB, many small businesses would have closed. CBN fails to understand these restrictions are hindering clearance of shipments at Port. For those not shipping from China, it is difficult to transfer payment to Shipper for BL. The governor has made things so bad in the sector. The banks are confused. Aboki on the street are confused. Importers are confused. Exporters are confused. |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Munzy14(m): 6:03am On Dec 02, 2020 |
BabaOwen:I swear, thats when a stooge is appointed to a sensitive position. The hoarding of dollar makes it appreciate over naira..Very simple logic. Dollar is scarce so those who have, decided to sell at an alarming rate of 500 |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by fid3fid: 6:17am On Dec 02, 2020 |
thebosstrevor1: Brother, try relate with what the guy said. High dollar exchange will significantly aid inflation because we are import dependent. Many of our stuff are imported, and the exchange rate will affect their prices. Higher exchange ---> increase in inflation -- thus affecting the pushing power of the Naira you have in saving |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by fid3fid: 6:25am On Dec 02, 2020 |
27Pushing30: Hello, are you currently working in the banking sector? If yes, could you help explain why some bank branches have different policy on FCY remittance? Some branches of the same bank will accept cash deposit for FCY transfer to oversea banks; and some will only TTB can be remitted outward. Some banks have completely closed FCY transfers. Why the messy policy? |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Nobody: 6:34am On Dec 02, 2020 |
Lagosianswag:Rallo |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 7:49am On Dec 02, 2020 |
Osheeeey! You just hit the nail ...well on target. A time will also come when even the parallel market would start rejecting the dollar cos they lack enough naira to buy it or it becomes too cumbersome to handle the naira. Hope we won't end up like Liberia whose main currency has been overshadowed by the US dollar ![]() teewaik: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 7:55am On Dec 02, 2020 |
You see now? Exactly what I'm saying ....the banks will frustrate you withdrawing your FX. You will go to a bank branch in Lekki and they will direct you to their branch at Ikorodu just to cash $100. Some may tell you to come back in x number of days when they hope to get replenished by the IMTO. Only a child born yesterday would not understand these tactics and what to expect with the new regulation. Neoteny: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 7:59am On Dec 02, 2020 |
But the parallel market is illegal, so why create and sustain a channel for it to thrive? One would've expected CBN to make it mandatory that after withdrawing the FX from the bank, you must sell to the BDC who will help them track the customer through BVN to tie the withdrawal to the exchange but no .....what would one want to withdraw FX from dom account if not to sell to get more Naira and inadvertently improve supply to the black market? Yes price may drop to kill them off but time would come when the economy itself would become dollarized ....why change to Naira and pay when you can as well pay in FX. Excellent7: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 8:05am On Dec 02, 2020 |
Funny thing is most banks don't do over the counter FX payouts It must be to your dom account or naira account ![]() Penboy: |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 8:08am On Dec 02, 2020 |
![]() ![]() ![]() Fibonacci88: 1 Like |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by IkUKU01(m): 9:08am On Dec 02, 2020 |
ILoveDemMANNA:Why didn't they implement this policy all these while ![]() |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by 27Pushing30: 9:19am On Dec 02, 2020 |
fid3fid: Risk appetite. plain and simple. BUT per the bolded "Some branches of the same bank will accept cash deposit for FCY transfer to oversea banks" - in my Bank like most banks branches are merely collection centers (for FCY transfer) the main transfer is done at a specialized unit and they usually check the source of the deposit before effecting transfer. ours is a limit of $10,000 per day (if it's a cash deposit). "Some banks have completely closed FCY transfers" - On online banking channels ... maybe but physical in branch transfers i seriously doubt that |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by Neoteny(m): 9:59am On Dec 02, 2020 |
bigtt76: They didn't send me anywhere. They only said the regulation prohibits withdrawal of dollar inflows, which describes my case, and thus the only way i could access my money is to sell off to them at official rates. I still have some cash trapped there so I'm glad the embargo is lifted, not that i need to withdraw since I'm not in the country and my dollar Mastercard is with me. Hope that clears up your misconceptions. |
Re: CBN Okays Withdrawals Of Dollars From Domiciliary Accounts by bigtt76(f): 10:05am On Dec 02, 2020 |
I get you clear ...my point is that some other customer suffer similar fate. They end up being frustrated. Thanks for sharing though. Neoteny: 1 Like |
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