Beneficiaries to receive foreign remittances only in dollar as CBN modifies rule

The regulator said in a circular on Monday titled ‘Amendment to Procedures for Receipt of Diaspora Remittances’ signed by CBN’s director of trade and exchange, O.S. Nnaji that the policy shift would help “liberalise, simplify and improve the receipt and administration of diaspora remittances into Nigeria.”

Foreign remittance inflows into Nigeria came to $23.63 billion in 2018, equivalent to 6.1% of the nation’s GDP and 83 per cent of government’s budget for that year, according to professional consultancy, PriceWaterhouseCoopers.

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“Recipients of foreign remittances will now have the option to receive such funds either in foreign currency cash (United States dollar) or into their ordinary domiciliary account,” the CBN document said.

“All authorised dealers and the general public should note that beneficiaries shall have unfettered access and utilisation to such foreign currency proceeds, either in cash and/or in their domiciliary accounts,” CBN added.

The country’s foreign exchange reserves, which currently stands at $35.4 billion, has depleted by 3% since May when the balance was $36.6 billion, after recovering from April lows.

Moves by the CBN to conserve the dollar reserves have triggered a rationing of foreign exchange that has created a liquidity challenge at the official forex spot market. Naira hit its four year low of N500 on the parallel market on Monday, following the weakening of the local currency by the regulator.