The foreign exchange (FX) market closed the week with Nigeria’s currency dropping by 0.42 percent as the dollar was quoted at N477 on Friday compared to N475, quoted last week on the black market.
Naira depreciation was as a result of strong demand for foreign exchange amid a shortage of dollars. At the Bureau De Change (BDC) segment, Naira steadied at N475 per dollar.
The daily foreign exchange turnover declined by 42.22 percent to $44.51 million on Friday from $77.04 million recorded on Thursday at the Investors and Exporters (I&E) forex window, data from FMDQ revealed.
The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of Covid-19 pandemic.
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Naira strengthened by N0.50 at the I&E window, closing at N394.2/USD from N393.7/USD in the prior week.
“Ahead of the Monetary Policy Committee meeting, we expect the market to be muted in search of market direction for the year,” analysts at Greenwich Merchant Bank said.
In an effort to promote transparency, grow diaspora remittances and significantly improve foreign exchange inflows into Nigeria, the Central Bank of Nigeria (CBN) on Friday issued a circular explaining the modalities for paying of Diaspora remittances.
One of the measures as stated in the circular was that only licensed International Money Transfer Operators (IMTOs) are permitted to carry on the business of facilitating diaspora remittances into the country.
Also, all diaspora remittances must be received by beneficiaries in foreign currency only (cash and/or transfers to domiciliary accounts of recipients).
Furthermore, IMTOs are not permitted, under any circumstances, to disburse diaspora remittances in naira (either in cash or by electronic transfers), be it through naira remittances settlement accounts (which had been earlier directed to be closed), third party accounts or via any other payment platforms within and/or around the Nigerian financial system.
The CBN said it observed that some IMTOs and unlicensed companies have continued to facilitate diaspora remittances into the country in naira, in clear contravention of its directive that all remittances be paid to beneficiaries in dollars.
The CBN said strict sanctions including withdrawal of operating licenses, shall be imposed on any individuals and/or institutions found to be aiding, abetting or directly contravening the guidelines.
The new circular issued on Friday, which was signed by Ozoemena Nnaji, director, trade and exchange department, followed two earlier circulars issued on December 16 and 2, 2020, titled ‘Receipt of Diaspora Remittances: Additional Operational Guidelines’ (December 16, 2020) and ‘Amendment to Procedures for Receipt of Diaspora Remittances (December 2, 2020).
“For unlicensed operators, the CBN shall not hesitate to authorise the closure of their accounts in Nigerian banks, including being barred from accessing banking services in Nigeria.
The CBN shall continue to monitor developments in this regard and will issue further guidance as appropriate,” the circular reads.
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