Studymore123:


The policy by CBN has nothing to do with banks but IMTOs. Banks are not licensed to be IMTOs but can be agents of IMTOs. It's not the bank that's generating the Fx. They are only agents to disburse the funds. Before everyone can collect USD from western union, the policy is only saying if someone sends you money via western union or other various channels, you can collect the cash in USD or have it sent to you dom account.
I only hope the IMTOs implement it soon

thebosstrevor1:


Nonsense analysis.

We dont use dollars in Nigeria

And most people dont care about dollar rate.

Inflation rate is what matters the most in a local economy

bigtt76:
While the move seem the sensible thing to do, here are my takes

1. Do the banks have enough FX cash to handle payouts in the same FX? People would experience delays in cashing out due to scarcity and or the banks waiting for CBN to sell to them or the IMTOs repatriating the FX back

2. Aren't the banks FX position funded by the CBN? If you allow FX cash withdrawals through the banks, you are depleting the FX reserve to fulfill the payouts which is more or less recycling your foreign reserve at a cost

3. While it seem laudable, the best benefit would've been achieved if the IMTOs are allowed to connect directly with the BDCs and also smaller agents, that way it would help attract hoarders into releasing their stash instead of hoarding.

4. Hoping this won't dollarize the economy because everyone who withdraws from their account are bound to look for mallam instead of selling to BDCs or Banks ....why the need to withdraw sef if you're not traveling?

5. I'm also hoping its not a trap by CBN to lure the funds in and trap them by telling the banks to frustrate withdrawals. When the customers can't get the cash, they'll be forced to accept cash equivalent in Naira. Government can at the end of the day force a conversion of all fx in domiciliary accounts.

Neoteny:
After they made me lose over 700k in September

PHIPEX:
It's not available because people moved their dollars to black market and Aboki kiosks. Where will the banks get it from?

teewaik:
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...

Johnrake69:
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

ILoveDemMANNA:
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.

ILoveDemMANNA:
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.

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

BigBashiru:


While price of dollar denominated imports has gone up at the same time that your savings has gone down....

ILoveDemMANNA:
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.

teewaik:
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...

lowkeybahdguy:
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..

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

bigtt76:
Exactly ...we all keep fingers crossed and watch what comes next

teewaik:
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...

NwaAmaikpe:




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.

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

thebosstrevor1:


Nonsense analysis.

We dont use dollars in Nigeria

And most people dont care about dollar rate.

Inflation rate is what matters the most in a local economy

27Pushing30:

I’m in banking so nah the guy you quoted is not being kiddish .

The tight squeeze on USD access by CBN even at a time when global economies are contracting due to COVID and Naija being an import dependent economy was always laughable.


Most times the constant policy summersaults make me wonder if these guys just read an economics textbook and immediately apply it without asking themselves why they (economists) actually advocate local solutions to local problems.

Additionally, l I’m an APC supporter but still CANNOT understand why they (govt ) are still keeping our borders shut shut

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


#MoB

teewaik:
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...

Neoteny:


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.

Excellent7:
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%.

Penboy:


You be clown.. The dollars is coming from overseas. What concerns bank and having dollars for payout?

Abroad bank send you dollars... The bank serving as a receiving end.. And you go collect your thing.

If that particular bank doesn't have, go island.

Fibonacci88:

Oga shut up. How does remittances to individual account boost foreign reserve. Do u even know what makes up foreign reserve. Export from crude oil is what makes up majorly foreign reserve for Nigeria. Try schooling urself a bit instead of jumping from thread to thread praising an incompetent presidency.

ILoveDemMANNA:

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

fid3fid:


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?

bigtt76:
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:


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.