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Banks to deposit excess dollars at CBN Lagos, Abuja office

Nigeria says FX inflows in Q1 represents 136% of 2023 level

The Central Bank of Nigeria (CBN) on Friday issued revised guidelines for Deposit Money Banks (DMBs) regarding the deposit of excess foreign currency notes at its Lagos and Abuja branches.

This initiative aims to align exchange rates between the parallel and official markets. The official Foreign exchange (FX) closed at N1,505.30 on Friday while the black market rate printed at N1,520.

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According to a circular issued on June 27, 2024, the CBN has approved DMBs to deposit their excess foreign currency notes with the Central Bank.

The approval is a response to the increasing demand by DMBs to deposit their forex cash with CBN for onward credit to their off-shore accounts with the correspondent banks

The guidelines outline specific procedures and limitations for these deposits. DMBs must provide at least three working days’ notice of their intent to deposit foreign currency, addressed in writing to the Branch Controller of CBN Lagos or Abuja. The notification must include a list of the owners of the foreign currency to be deposited.

CBN pegs maximum deposit for $100, $50 at $10m

There are also specified deposit thresholds. Higher denomination USD notes (USD100 and USD50) have a maximum daily deposit limit of USD10 million, while lower denomination USD notes (USD20 and below) have a maximum daily deposit limit of USD1 million. GBP notes have a maximum daily deposit limit of GBP1 million, and Euro notes have a maximum daily deposit limit of EUR1 million.

Read also: Naira remains calm across FX markets dollar sales rise by 94.46%

Additionally, two representatives from the depositing bank must be present to witness and confirm the amount being deposited. Deposits can include USD notes of various denominations (USD100, USD50, USD20, USD10, USD5, USD1), as well as all GBP and Euro denominations. Each denomination must be packaged in separate boxes.

Naira ends month with 1.94% loss against dollar

The naira ended the month with a 1.94 percent lost as the dollar closed the month of June at N1,505.30 on Friday from N1,476.12 quoted at the beginning of the month, data from the FMDQ Securities Exchange Limited showed.

This is despite an increase in dollar sales, which rose by 54.12 percent to $187.82 million on Friday from $121.87 million recorded on June 3, 2024.

At the parallel market, also known as black market, the naira lost 2.63 percent as the dollar was quoted at N1,520 to close FX trading for the month, compared to N1,480 quoted at the beginning of the month.