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Domestic account holders of Nigeria will be able to access the funds in their accounts without hindrance from the Central Bank of Nigeria (CBN), as it has lifted the $10k deposit limit.
A statement issued by the bank on June 18th followed a meeting with the bankers’ committee. The purpose of the meeting was to provide further guidelines to deposit money banks (DMBs) regarding the recent changes to the foreign exchange market and to discuss how these changes will be implemented and the implications for financial institutions. Regulatory instructions from the Central Bank of Nigeria nullify the transaction limit placed on domiciliary accounts by the banks in 2021.
Following reforms to reposition the country’s economy, the Nigerian foreign exchange (FX) market has witnessed several significant events. On June 14th, the regulator announced that all Nigerian foreign exchange market segments would be unified and the local currency would be floated. As a result of this policy, all foreign exchange windows are effectively integrated into the I&E window of the CBN.
CBN’s latest statement stated that with the changes to its policy, it aims to improve FX supply by promoting transparency, liquidity, and price discovery. According to the apex bank, by implementing this policy, speculation will be prevented, customer confidence will be enhanced, and a stable foreign exchange market will be ensured. Nevertheless, authorised dealers and the general public will receive more information shortly.
The CBN, in a statement, said, “All visible and invisible transactions (medicals, school fees, BTA/PTA, airline, and other remittances) are eligible for the investors’ and exporters’ (I&E) window. DMBs shall ensure expeditious processing of all eligible and invisible transactions on behalf of their customers using the applicable rate at the I&E window. Ordinary domestic account holders shall have unfettered and unrestricted access to funds in their accounts. Domiciliary account holders can utilise cash deposits not exceeding $10,000 per day or its equivalent via telegraphic transfer. DMBs shall provide returns to the CBN, including the purpose for such transactions. Cash deposits into domiciliary accounts will not be restricted, subject to DMBs conducting proper KYC (know your customer), due diligence, and adhering to the spirit and letter of extant anti-money laundering/ combating terrorism financing laws and other relevant rules and regulations. The CBN will prioritise the orderly settlement of any committed FX forward transactions as they fall due to further boost market confidence.”
The cash reserve ratio (CRR) throughout the banking industry will ensure equity and preserve the bank’s processes. The CBN assured the banking public that it remains committed to “ensuring a stable and efficient FX market that meets the needs of all legitimate users.”