CBN clarifies operation of domiciliary account and grants unrestricted access to receipt of diaspora remittances
The Central Bank of Nigeria (CBN) on 30 November 2020 issued two Circulars with Ref. Nos. TED/FEM/FPC/GEN/ 01/010 and TED/FEM/FPC/GEN/ 01/011 (“the Circulars”) to make clarifications on the operation of domiciliary accounts and amending the procedures for the receipt of diaspora remittances into Nigeria, respectively. The clarifications and amendments are aimed to stabilize and deepen the foreign exchange (FX) market, provide more liquidity and create transparency, especially in the administration of diaspora remittances into Nigeria
The Circulars provide that:
These are tough times for the Nigerian economy that require appropriate policy measures. The FX market has been particularly challenged with Naira/US$ exchange rate escalating to slightly above ₦500 in the parallel market in the week of 23 November 2020. It is gratifying to note that the CBN intervention in terms of FX supply has helped to calm the market with the Naira/US$ exchange rate now averaging between ₦460 and ₦470. The recovery of crude oil prices in 2017 helped to boost our FX reserves and drove down the parallel market rate from ₦520 high to average ₦360 - ₦365 until COVID-19 pandemic broke out and crude oil prices crashed again. To break this vicious cycle, we need to look beyond oil for most of our FX inflows and launch a new liberalized FX regime that will make Nigeria attract FX inflows from other sources, boost our FX reserves and stabilize the Naira exchange rate. At the same time, we must do more to promote non-oil export sector development and reduce our dependency on importation of goods and services that can be produced locally.
Please click the links below to access the CBN’s Circulars:
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