- Says it can be sold anywhere, including black market
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 to all authorized dealers and the general public and signed by its Director for Trade and Exchange Department, Dr. O.S. Nnaji.
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 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.
This new directive means that when Nigerians living in Diaspora transfer money to loved ones back home, 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.
Recall that earlier in the year, the CBN claimed it was investigating remittances in the Diaspora between January 2016 and December 2019.
