Foreign exchange for medical bills, school fees, basic and personal travel allowances, airline tickets and other visible and invisible transactions can now be accessed through the Investors’ and Exporters’ (I&E) window, the Central Bank said on Sunday.
Following the June 14, 2023, release of the new guidelines on the foreign exchange market by the CBN, the Bankers’ Committee held an extraordinary meeting last Friday to review the market and discuss the implementation of the new policy and its implications for the banking public.
While announcing the new guidelines, the Director, Financial Markets of the CBN, Angela, Sere-Ejimbe, said the policy changes were aimed at promoting transparency, liquidity and price discovery in the market to improve foreign exchange supply, discourage speculation, enhance customer confidence and ensure overall stability in the FX market.
But, more guidelines were released on Friday at the end of the meeting to further clarify issues and provide further guidance to Deposit Money Banks (DMBs) on the operations at the market.
The Director, Corporate Communications at the CBN, Isa Abdulmumin, said the additional guidelines were in line with deliberations at the meeting.
The additional guidelines included that all visible and invisible transactions were now eligible to be carried out through I&E window, with DMBs charged with the responsibility of expeditiously processing all such transactions on behalf of their customers using the applicable rates.
Ordinary domiciliary account holders, the Bankers Committee directed, shall have unfettered and unrestricted access to funds in their accounts, while domiciliary account holders were henceforth permitted to utilize cash deposits not exceeding $10,000 per day or its equivalent through telegraphic transfers.
In addition, DMBs shall ensure that returns were provided to the CBN, including the “purpose” for such transactions.
Also, cash deposits into domiciliary accounts would not be restricted, subject to DMBs conducting proper know-your-customer (KYC) investigations, due diligence and adhering to the spirit and letter of extant Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws and other relevant rules and regulations.
Isa said the CBN would prioritize the orderly settlement of any committed foreign exchange forward transactions as they fall due in order to further boost market confidence.
Besides, he said the apex bank would normalize its cash reserve ratio (CRR) maintenance processes and ensure equity in its implementation across the banking industry, adding that the CBN would continue to engage stakeholders and issue further guidance as the implementation of the reforms was ongoing.
Meanwhile, just as the Bankers were meeting, the International Monetary Fund (IMF) gave its backing to the country’s foreign exchange market reforms aimed at establishing a unified market-reflective exchange rate regime.
The IMF Resident Representative in Nigeria, Ari Aisen, pledged the Fund’s support necessary to enable the reforms to succeed.
Aisen said establishing a single foreign exchange market rate in the country aligned with its long-standing recommendation to strengthen and grow the country’s economy.
