CBN to open special window for dividend remittances

Indication emerged yesterday that the Central Bank of Nigeria (CBN) may open special window for dividend remittances in an effort to ease pressure in the foreign exchange market.

Some authoritative sources at the CBN have also said that in an attempt to boost forex supply, the CBN will soon not only begin spot forex auction sales, but also open a special window for investors to trade freely for certain eligible transactions, particularly dividends and investment remittances .

Small and Medium Enterprises (SMEs) in the country involved in the importation of critical and eligible finished and semi-finished goods can now heave a sigh of relief as the Central Bank of Nigeria (CBN) on Tuesday, April 11, 2017, made spot sales totaling $100 million to interested SMEs through its newly opened Forex window for small scale importers.

Also on Tuesday, the CBN released its results of 7 – 30 days forwards wholesale of $100million, even as authorized dealers subscribed fully to the $100 million offered by the CBN at the forex auction in the interbank wholesale window on Monday, April 10, 2017.

Isaac Okorafor, Acting Director, Corporate Communications at the CBN, disclosed these in a chat with newsmen, saying that the new window for SMEs provides small scale importers an avenue to source forex to boost their respective businesses through the importation of eligible finished and semi-finished items. He, however, restated that no SME will be allowed to transact more than $20,000 per quarter.

About 3135 Buraeu De Change (BDCs) on Tuesday accessed $10,000 each from the proceeds of the International Money Transfer Operators (IMTOs). 

Aminu Gwadabe, president of the Association of Bureau de Change Operators of Nigeria (ABCON), who disclosed this to BusinessDay said the CBN also approved $10,000 for each BDCs tomorrow.

The local currency was quoted at N410 and N407 per dollar in some places in Lagos on Tuesday but Gwadabe said it closed at the rate of N405 per dollar.

There have been doubts over the ability of the apex bank to sustain the current rate of liquidity in the market. Some experts have, however, pointed out that going by the current level of reserves, the accretion from oil revenues and the subdued level of demand, the CBN has the capacity to sustain supply even if it has to keep doing so for the next three months. They pointed out that last September, the Bank survived with a reserve level as low as $24bn, reasoning that the gap between that and current levels stands at over $6bn, an amount that can sustain the market for a long time, coupled with ongoing steady accretion from global oil prices.