CBN issues new guidelines for receipt of FX remittances

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By Kayode Tokede

The Central Bank of Nigeria (CBN) has announced that beneficiaries of diaspora remittances through the  international monetary transfer operators (IMTO) shall now such inflows in foreign currency (US Dollar) through the designated bank of their choice.

The apex bank in a statement signed by O.S. Nnaji, director of trade & exchange of CBN, said recipients of such remittances may have the option of receiving these funds in foreign currency cash or into their domiciliary account.

“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 statement read.

“In addition, these changes would help finance a future stream of investment opportunities for Nigerians in the Diaspora, while also guaranteeing that recipients would receive a market reflective exchange rate for the market.”

The apex bank also noted that beneficiaries shall have unfettered access and utilisation to such foreign currency proceeds , either in cash and or in their domiciliary accounts.

This is coming on the heels of foreign exchange pressure on local currency.

The naira at the parallel market depreciated by 0.77 per cent, 1.01 per cent and 0.86 per cent against the Pound, dollar and Euro to close at N650, N500 and N585 respectively.

At the Investors & Exporters Foreign Exchange (I & EFX) window, while the Naira closed down by 0.53 per cent and 0.13 per cent against the pound and Euro to print at N520.99 and N466.43 respectively, it printed flat vs the dollar at N390.25.

Nigerian NewsDirect reported on Monday that Nigeria at  $54.36million in September 2020 recorded lowest direct remittances from abroad since 2013.

The international payments data of the apex bank revealed that Nigeria total remittances tumbled in 2020 as COVID-19 pandemic affected the income of Nigerians living abroad.

The CBN data revealed that total remittances in January was $2.05billion but dropped to $1.02billion in February. The date revealed that total direct remittance in March was $444.8million and declined significantly to $392.25million in April.

In May, it was $252.78million; June, $446.15million; July, $118.75million and August, $217.8million.

Nigerian NewsDirect gathered that a total of $14.9billion was the total direct remittances in nine months of 2019 as against $4.99billion in nine months of 2020.

The international payments data by CBN highlights how bad the global economic crunch has affected the income of people across the world especially Nigerians in diaspora looking to send money to their families. Most have either lost their jobs or seen their earnings tumble due to the global lockdowns.

Nigeria also relies on dollar inflows from remittances to improve on its balance of payment position, a critical economic indicator used in determining a country’s foreign exchange position.