In a bid to boost the supply of dollar into the Nigerian economy, the Central Bank of Nigeria has introduced new rules that allow beneficiaries of diaspora remittance and transfers into domiciliary accounts to receive their money in foreign currency.
Initially, beneficiaries of diaspora remittance only received in cash the naira equivalent of the amount transferred. Also foreign currency cash withdrawal from domiciliary accounts was restricted to money paid into such accounts by cash lodgments.
The policy change was announced yesterday, November 30, 2020 in a circular released by CBN’s Director for Trade and Exchange Department, Dr. O Nnaji, titled, “Amendment to procedures for Receipt Of Diaspora Remittance and Operations of Domiciliary Account”. He said the new rules were to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, as well as to ensure the stability of the foreign exchange market.
Nnaji said the new development was also consequent on the improved capabilities of the apex bank to monitor transactions, forestall money laundering and prevent the adverse effect of dollarization in the economy. Part of the circular says, “In an effort to liberalize, simplify and improve the receipt and administration of diaspora remittances into Nigeria, the Central Bank of Nigeria 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) through the designated bank of their choice.
“Such recipients of remittances may have the option of receiving these funds in foreign currency cash (US Dollars) or into their ordinary 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.
“In addition, 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.
‘All Authorized Dealers and the general public should 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 our circular TED/FEM/FPC/GEN/01/010. Please ensure strict compliance and be guided accordingly.”
