Frantic CBN allows diaspora remittances to be withdrawn in dollars and sold anywhere including black market

To save the naira, CBN now allows diaspora remittances to be withdrawn dollar cash.

The Central Bank of Nigeria (CBN) has announced the amendment of procedures for receipt of diaspora remittances in an apparent and frantic attempt to improve liquidity in the forex market and reduce the disparity between the black market and official I&E window.

This disclosure was made in a circular issued by the CBN on Monday, November 30, 2020, to all authorized dealers and the general public and signed by its Director for Trade and Exchange Department, Dr O.S. Nnaji.

What the CBN is saying
In the new amended procedure, CBN stated that beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) through the designated bank of their choice.

The CBN’s circular partly reads,

‘’In an effort to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, the Central Bank of Nigeria (CBN) wishes to announce as follows;

Beneficiaries of Diaspora Remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US Dollars) or into their ordinary domiciliary account. Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.’’

The apex bank also stated that such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary domiciliary account.
The CBN stated that these changes are necessary to deepen the foreign exchange market, provide more liquidity and create more transparency in the administration of diaspora remittances into Nigeria.

The apex bank also points out that these changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients of remittances would receive a market-reflective exchange rate for their inflows.

It also urged all authorized dealers and the general public to note that beneficiaries shall have unfettered access and utilization to such foreign currency proceeds, either in cash and/or in their domiciliary accounts in line with the circular.

What this means
This new directive means when Nigerians living in diaspora transfer money to loved ones in the country, they can in turn withdraw the money in dollar cash and sell wherever they want to.

Currently, the exchange rate in the black market is around N500/$1 compared to N395 at the official BDC market.

Now, Nigerians who recieve foreign transfers such as Western Union or Moneygram can withdraw it in dollars and then sell at the black market rate or wherever they want to.
Currently, most Nigerians living in diaspora who transfer cash to loved ones back home do so at the parallel market exchange rate, Nairametrics can confirm.

The optics
Nairametrics believes this latest move by the CBN is aimed squarely at improving liquidity in the retail end of the foreign exchange market hoping that this will strengthen the naira at the retail end of the black market.

In a news interview on Arise TV, Dr. Nnaji explained that “when you have more inflows into the country at dollar value it will help bring down the BDC rates, it will also help solidify or unify the rates in the market so we don’t have multiple currency rates,” a confirmation that this is targeted at the black market.

A visibly pertubed and contrite Nnaji reiterated that “for now because US dollar is a currency that we have available in the banking sector, you can collect your money in US dollars” maintaining that this was the only currency that you withdraw for now.

She also claimed you can collect in Naira.
Nigeria receives an average of $5 billion per quarter in foreign remittances but suffered a sharp drop in the second quarter of 2020 when it fell to $3.38 billion.

Flashback on Dr. Nnaji
Earlier in the year, Nairametrics reported that the CBN claimed it was investigating remittances in the diaspora between January 2016 and December 2019. Ironically, the same person who made the claim was Dr. Nnaji. Here is what she said;

“If the dollar and euro are everywhere, what happens to our currency, the Naira now is not an internationally accepted currency, if we dilute it, it will have consequences. We want our Naira to be acceptable by other West African countries; we want it to be an internationally accepted currency.

“If we have more funds come in as remittances, our foreign reserves go up, and when that happens, the confidence in the Nigerian economy will go up. It helped in price stability and exchange rate stability management and that the apex bank was interesting in increasing Diaspora remittances"

Source: https://nairametrics.com/2020/11/30/cbn-allows-diaspora-remittances-to-be-withdrawn-in-dollars/

Dollar go begin scarce for bank...

Nah wah o... Emefiele is one of the most terrible CBN governor

Time to watch and see how this one plays out. This move appears to have been borne out of desperation by CBN. The same cbn that flayed receiving foreign currency deposits in February this year, has now made a full u-turn.

https://nairametrics.com/2020/02/14/cbn-condemns-receiving-foreign-currency-in-transfers/

Interesting times ahead..

When you have more inflows into the country at dollar value it will help bring down the BDC rates,
it will also help solidify or unify the rates in the market so we don’t have multiple currency rates.


This new directive means when Nigerians living in diaspora transfer money to loved ones in the country, they can in turn withdraw the money in dollar cash and sell wherever they want to.

Now, Nigerians who recieve foreign transfers such as Western Union or Moneygram can withdraw it in dollars and then sell at the black market rate or wherever they want to.

E remain small make dem buy naija

G

BabaOwen:
Nah wah o... Emefiele is one of the most terrible CBN governor

What do kids know

If we have more funds come in as remittances, our foreign reserves go up, and when that happens, the confidence in the Nigerian economy will go up

E be things

Make we hope say he go get positive effects on our economy

TIme for Naira to free fall to 1000

If you had 360k in savings, which was $1000, now your money is only worth $700.

And it keeps falling until your money is worth less than $500.

Just in case you don’t understand how this is affecting you

Godwin emefiele, chai, God help us oh, these people are as clueless as the word itself...

Well, let's see how the bank complies with this.

This should have been done since. Some people in America now take advantage of this in pushing the rate so high. They buy up dollars from people that want to remit funds back to Nigeria. And push the rate up for people trying to send money to Asia.


Let the banks remove their hands from foreign exchange and focus on providing core banking services. They have created more problems by their profiteering drive on FX

Free fall of Naira. Brace up

MrBabyOmoniyi:
Make we hope say he go get positive effects on our economy

Good boy at last.
Nice post.

Yes, it will

All things pass and pain is temporary. It comes to teach a lesson and when the lesson is understood it disappears into the night.

APC trying all there best to make sure dollar is one to one before 2023.

At long last

Okay

Hope it would be at the official rate and no limits too

g

So they just got their senses back

Dollar, Pounds Sterling FX Is Currently The Love Of My Life, It literally Pays To Be Rich


#MoB

The CBN is banking on the fact that the forces of demand and supply will play a significant role in controlling the outrageous rate at which the dollar is rising. Well, time will tell. Nothing is certain in economy.

Clutching at straws by our darling government.

SenecaTheYonger:
TIme for Naira to free fall to 1000

If you had 360k in savings, which was $1000, now your money is only worth $700.

And it keeps falling until your money is worth less than $500.

Just in case you don’t understand how this is affecting you

Nairalanders, listen to this bvllshit at your own peril.
Na so dem go dey type lies and rubbish online with such colossal confidence.
Tueh!

The fvck
Niggarr!!

ILoveDemMANNA:

What do kids know

Humm...

If we have more funds come in as remittances, our foreign reserves go up, and when that happens, the confidence in the Nigerian economy will go up

Yes oh. I think the governo is try his best if not because of covid-19 that destroyed the economy world wide. Let just be patient

The Central Bank Of Nigeria was designed to be independent of the Executive.
This independence of thoughts, strategies and policies was promoted by Clement Isong who avoided running up unsupportable debts and further heightened by Lamido Sanusi who questioned the fuel subsidy funding, challenged the budgetary spending of 25% of all government revenue by the legislative and also rejected the International Monetary Fund's insistence that the Naira be devalued.

Both CBN governors had disagreements on policies with the Heads of State they served under.
Isong with Gowon and Sanusi with Jonathan.

But what we have today is a yessir dummy; one who goes to Economic Summit Forums only to receive orders and ask where to sign from people who don't know their North pole from their South pole in Finance, Macroeconomics or Business.

CBN's recent unstable policies on FX usage and allocation are obviously rushed and ill-thought out...more like permutations from illiterate financial pundits whose major aims are to frustrate perceived political enemies and to perpetually keep a certain group at financial business disadvantage.

Just when you are just about to get used to one nonsense rule they reverse it and later reimpose it.
What has mandating that offshore and FX transfers are to be made from your Telegraphic Transfer Balance (TTB) and not cash deposits got to do with the exchange rate or availability of FX?

To me it is simply to ensure some people's money rots with them. That is vendetta and not strategic thinking.

Godwin Emefiele is less than a rubber stamp.
He is a stamp carved out of decayed cocoyam. If he had any decency in him, he would have resigned 3years ago.
But keeping his job by licking ass is more important than leaving a name in Sterling.

The economy is on a free fall.
Interest rates on deposits are almost non-existent, stamp duty is charged on Savings accounts, accounts of perceived "enemies" of the government are flagged and frozen. Unsustainable loans are requested every now and then to sustain our outrageously exorbitant cost of governance.

If not for the abundance of Ponzi Schemes masquerading as FX investors, Nigerians would have been eating stone now.

I miss Charles Soludo.
I miss Sanusi Lamido Sanusi.
The CBN is just like the NLC; a total write-off.

ATEAMS:
All things pass and pain is temporary. It comes to teach a lesson and when the lesson is understood it disappears into the night.

True talk!
You have said it all.....Wise man.

Trial and error CBN governor
Nothing just they him head
Just pay me my covid 19 loan make I add japa