Central Bank of Nigeria foreign exchange coverage timelines 2020-2021

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Since the primary quarter of 2020, Nigeria has confronted an alternate price disaster triggered by the drop in oil costs. It began after two of the world’s largest oil producers, Saudi Arabia and Russia, disagreed on proceed regarding oil provide cuts, which triggered a worth battle that pushed oil costs to crash to as little as beneath zero {dollars}.

In March 2020, the world absolutely turned conscious of the existential menace that was the Covid-19 pandemic, which has since affected hundreds of thousands of individuals globally and killed a whole bunch of hundreds. These twin occasions have had a telling impact on Nigeria’s economic system. As an economic system extremely depending on crude, the oil worth battle meant Nigeria earned much less from crude oil gross sales cascading to a good bigger drawback – Forex.

With oil costs down, strain on Nigeria’s alternate price grew, resulting in speculations of a devaluation to replicate the true worth of the naira. Thus started one of the vital vital deluges of coverage pronouncements and flip-flops on the administration of Nigeria’s international foreign money.

READ: Nigeria to post bigger contraction in Q3, as PMI deeps further

In this tracker, Nairametrics collates a timeline of all of the forex-related coverage selections and denials which have occurred since March 2020. This timeline is up to date recurrently as new info turns into obtainable.

March 5, 2021

The Central Bank of Nigeria (CBN) has introduced a ‘Naira 4 Dollar Scheme’ for diaspora remittances,  which affords recipients of diaspora remittances by CBN’s IMTOs to be paid N5 for each $1 obtained as remittance influx.

The scheme takes impact from Monday, March 8, 2021, and ends on Saturday, May 8, 2021.

March 1, 2021

The alternate price between the naira and the US Dollar depreciated to shut at N410.25/$1 on the Investors and Exporters (NAFEX) window, the place foreign exchange is traded formally. This is because the CBN Governor has instructed that the official alternate price has been devalued.

Similarly, on the parallel market the place foreign exchange is traded unofficially, the naira depreciated closing at N482/$1 on Friday, February 26. This represents 0.42% drop when in comparison with the N480/$1 that it closed on the earlier buying and selling day.

January 26, 2021

To streamline provide and guarantee there is sufficient to meet rising demand, the CBN moved to make sure strict financial management of the foreign exchange market threatening to expel exporters who refuse to remit international alternate proceeds within the NAFEX market. It additionally warned towards paying diaspora remittances in naira. 

The CBN might have additionally confirmed the foreign exchange pressures companies are dealing with in its financial coverage communique of January 26, 2020 when it cited it as a motive for the weak buying managers index.

January 22, 2021

The Central Bank of Nigeria (CBN) in a brand new round, read the riot act to the International Money Transfer Operators (IMTOs) as they’ve threatened to sanction a few of them who nonetheless facilitate diaspora remittances in naira, opposite to its earlier directive that it should be in international foreign money.

December 02, 2020

Central Bank of Nigeria (CBN) issued an replace to its latest round on the administration of remittances from diaspora Nigerians. In a round posted on its web site, the apex financial institution instructed banks to switch all diaspora remittances to the domiciliary accounts of the beneficiaries or pay the purchasers in international foreign money.

On cost of international transfers, it additionally clarified that the selection of how the cash needs to be paid, whether or not switch or greenback money withdrawal, was left to the beneficiary of the remittance.

The round additionally instructed the IMTOs to make sure the international foreign money was deposited into their corresponding deposit cash financial institution accounts. It additionally confirmed banks have been to pay the {dollars} to the beneficiaries both through transfers to domiciliary accounts or in money.

November 30, 2020

The Central Bank of Nigeria (CBN) introduced the modification of procedures for receipt of diaspora remittances in an obvious and frantic try to enhance liquidity within the foreign exchange market and cut back the disparity between the black market and official I&E window.

The disclosure was made in a circular issued by the CBN on Monday, November 30, 2020, to all licensed sellers and most people, and signed by its Director for Trade and Exchange Department, Dr O.S. Nnaji.

In the brand new amended process, CBN said that beneficiaries of Diaspora Remittances by International Money Transfer Operators (IMTOs) would thenceforth obtain such inflows in international foreign money (US Dollars) by the designated financial institution of their selection.

November 18, 2020

Central Bank of Nigeria (CBN), in a brand new round, clarified its place on the removing of third events from shopping for of international alternate routed by Form M, letters of credit score, and different types of cost

While reiterating its earlier directive that vacation spot cost for all types M, letters of credit score, and different types of cost needs to be made on to the ‘Ultimate Supplier of Products,’ it gave situations that should be met by importers in the event that they selected to make use of a shopping for firm aside from the first producer.

That was disclosed in a round with Reference quantity TED/FEM/FPC/GEN/01/009, which was issued by the CBN to all licensed sellers and most people on November 18, 2020, and signed by its Director for Trade and Exchange, Dr. O. S. Nnaji. The round was a follow-up to at least one earlier issued by the apex financial institution on the identical subject material in August 2020.

November 17, 2020

The Federal Government introduced plans to make international alternate obtainable to petroleum product entrepreneurs, in an effort to make the importation of petrol into the nation aggressive, cut back the rising price of the product, and cease the overdependence on the Nigerian National Petroleum Corporation (NNPC) for its importation.

The disclosure was made by the National President of Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Okonkwo, after the oil entrepreneurs had met with officers of the Federal Ministry of Finance on the necessity to make the international alternate obtainable for petrol imports.

November 11, 2020

The naira remained steady towards the greenback, closing at N465/$1 on the parallel market, as Bureau De Change operators acquired one other spherical of greenback provide from the Central Bank of Nigeria.

November 03, 2020

The naira remained steady towards the greenback, closing at N463/$1 on the parallel market on Tuesday, November 3, 2020, as BDCs acquired one other round of dollar provide from CBN.

That was additionally as companies that have been shut down because of the outbreak of violence in Lagos and a few components of the nation in the course of the protests towards the particular anti-robbery unit (SARS) and police brutality by the Nigerian youths acquired again to full exercise.

October 16, 2020

Banks restricted international alternate transactions by each people and company organizations on the unofficial black market to curb hypothesis.

That was regardless of the continuation of the protest towards the particular anti-robbery unit (SARS) by the Nigerian youth which restricted motion in main cities throughout the nation, particularly Lagos.

October 7, 2020

The CBN bought over $450 million to BDCs for the reason that resumed foreign exchange gross sales on Monday, September 7, 2020. That was anticipated to inject extra liquidity to the retail finish of the international alternate market and discourage hoarding and hypothesis.

However, the exchange rate towards the greenback did not maintain the preliminary good points made, after the CBN introduced plans to offer liquidity.

BDC operators urged the apex financial institution to rethink the margin allowed for the foreign money merchants, because it was insufficient to satisfy their bills.

September 25, 2020

The CBN bought over $200 million to BDCs for the reason that resumed foreign exchange gross sales on Monday, September 7, 2020. It was anticipated to inject extra liquidity to the retail finish of the international alternate market, and discourage hoarding and hypothesis.

However, the alternate price towards the greenback did not maintain the preliminary good points made, after the CBN introduced plans to offer liquidity.

BDC operators urged the apex financial institution to rethink the margin allowed for the foreign money merchants, because it was insufficient to satisfy their bills.

September 12, 2020

The World Bank expressed reservations in regards to the Foreign Exchange measures rolled out by the Central Bank of Nigeria. The multilateral financial institution urged the CBN to accentuate its efforts in direction of easing the strain on the nation’s FX market.

That was disclosed by the World Bank’s nation director, Shubham Chaudhuri, through e mail to an inquiry by Bloomberg.

Chaudhuri stated, “stronger action and a clear commitment from the CBN would go a long way towards facilitating a stronger recovery, despite its recent resumption of dollar sales to the BDCs after a 5-month suspension.”

September 11, 2020

The presidency defined why President Muhammadu Buhari had ordered the Central Bank of Nigeria (CBN) to cease making obtainable, international alternate to importers of fertilizer and meals objects, regardless of criticisms from some FX analysts and stakeholders.

It revealed that the transfer by the president to droop the allocation of foreign exchange for meals and fertilizer imports was an motion borne out of patriotism.

The disclosure was made by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, when he appeared as a visitor, on Channels Television’s Sunrise Program, on Friday, September 11, 2020.

September 6, 2020

A memo circulating on-line indicated that the Central Bank had instructed banks to Post-No-Debit on the accounts of 38 corporations.

A Post-No-Debit (PND) is mainly an instruction to banks to not permit any withdrawal or switch from the checking account of account homeowners, primarily blocking the account from outflows. It is normally drastic a measure taken to permit for investigation and potential reclaiming of any unlawful influx into an account.

The CBN didn’t state why the accounts have been flagged, however sources knowledgeable Nairametrics that it was attributable to suspicion of foreign exchange infractions.

September 3, 2020

Nigeria’s central financial institution pumped in $50 million into the FX market on Monday in a bid to check demand and provide and extra importantly, the value of naira towards the greenback.

$50 million was bought to foreign investors on the spot and ahead market in what it termed a “test trade to gauge the level of dollar demand” available in the market.

August 28, 2020

The Central Bank of Nigeria (CBN) barred operators of Payment Service Banks (PSBs) from accepting international alternate deposits and to just accept any closed scheme digital worth (airtime) as a type of deposit or cost.

This was disclosed by the apex financial institution within the reviewed guidelines for licensing and laws of PSBs launched on its web site.

August 27, 2020

Nigeria’s Central Bank issued a round authorizing and instructing sellers to promote foreign exchange to finish customers at N386/$1.

In a round titled, “Weekly Exchange Rate for Disbursement of Proceeds of International Money Transfer Service Operations” the apex financial institution detailed the relevant alternate price of proceeds of IMTOs for the interval, August 31, 2020.

Get financial and economic data from Nairametrics on Nairalytics

August 26, 2020

The Central Bank of Nigeria (CBN) vowed to go robust on exporters who have been responsible of forex non-repatriation. It was a part of the CBN’s ongoing efforts to resolve the prevalent foreign exchange disaster within the nation by growing foreign exchange liquidity.

To that finish, the CBN directed banks to submit the names, addresses, and Bank Verification Numbers (BVNs) of all of the exporters who had did not repatriate their export proceeds. Necessary ‘action’ could be taken towards such defaulters, the CBN stated in a press release.

The assertion additional famous that the Central Bank Governor, Godwin Emefiele, gave the directive on August 25, 2020, whereas nearly attending a Bankers’ Committee assembly.

READ: CBN says 22 banks to restructure over 35,000 loans due to COVID-19

August 24, 2020

Central Bank of Nigeria (CBN) issued a round eradicating shopping for brokers/corporations or any third social gathering from accessing its SMIS foreign exchange window by FORM M foreign exchange purchases.

In a round dated August 24, 2020, the apex financial institution instructed that “Authorized Dealers are herby directed to desist from the opening of Form M whose payment is routed through a buying company/agent or any other third parties” successfully eliminating third events or middlemen from transacting in foreign exchange offers in its official SMIS window.”

READ: What Nigeria may have bargained for with Emefiele’s reappointment

August sixth, 2020

Information on the web site of the CBN revealed the apex financial institution had adjusted the official alternate price to N380/$1 from N360.1/$1. The adjustment occurred on Thursday, August sixth, 2020.

It instructed the CBN may need unified the exchange rate in step with the promise made by the Governor of the Central Bank of Nigeria.

July 13, 2020

CBN restricted entry for the importation of maize by the official CBN forex window.

It hinged its resolution on the necessity ‘to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods and increase jobs which were lost as a result of the ongoing COVID-19 pandemic.’

July 3, 2020

CBN reportedly instructed bidders at its Secondary Market Intervention Sales (SMIS) to extend their bidding worth to N380/$1 ground. The SMIS is the market the place importers bid for foreign exchange utilizing Letters of Credit and Forms M.

The apex financial institution allegedly knowledgeable banks that they might solely settle for bids from N380/$1 and above, and now not N360/$1 that means those that bid decrease won’t get any foreign exchange allocation.

Transaction success on this market relies on bids with those that bid increased than the ground as they’re usually in an advantageous place to safe foreign exchange.

June 23, 2020

The Governor of the Central Bank, Godwin Emefiele, confirmed that the CBN would proceed to pursue unification around its Nafex rate. The NAFEX price is the foreign exchange window the place Investors and Exporters transact {dollars} on market-determined costs. The CBN Governor stated this at an Investors Conference with the Federal Government of Nigeria by CitiBank.

May 21, 2020

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, warned companies and people towards patronizing the parallel market, popularly referred to as the black market.

He warned them to cease utilizing black markets for international foreign money alternate, following the liquidity disaster triggered by low oil costs and a scarcity of {dollars}.

READ: Exchange rate depreciates at NAFEX window as forex liquidity drops further by 57%

May 19, 2020

The Central Bank of Nigeria (CBN), in its quest to stabilize Naira injected funds to the foreign money market by the Wholesale Secondary Market Interventions.

The public sale was earlier placed on maintain by the CBN because of the COVID-19 pandemic and dwindling international alternate reserves standing at lower than $34 billion.

READ: Zenith Bank’s Profit After Tax in H1,2020 rises by 16.8% to N103.8 billion

May 18, 2020

The Central Bank of Nigeria (CBN) tasked industrial conglomerates working within the nation to help efforts of the federal government to develop the nation’s economic system and return it to its inexperienced days.

The CBN boss warned that the apex financial institution wouldn’t help the importation of things that might be produced in Nigeria. According to him, the financial institution couldn’t spend its international alternate reserves on what wouldn’t increase the economic system and generate jobs for Nigerians.

May 10, 2020

The Central Bank of Nigeria (CBN) assured international buyers that repatriating their funds from the nation was secured, regardless of forex related revenue shortages because of the drop from the sale of crude oil globally.

In the assertion, CBN Governor, Godwin Emefiele defined that the apex financial institution had put in place insurance policies to make sure an orderly exit for those who is likely to be fascinated about doing so and in addition urged buyers to be affected person as such repatriations have been processed, owing to the Bank’s coverage of orderly exit of investments.

April 29, 2020

The Central Bank of Nigeria (CBN) resumed gross sales of {dollars} to SMEs that wanted international alternate for important imports, in addition to Nigerian students in international faculties who wanted to pay their faculty charges.

According to a short assertion that was signed by the CBN’s Director of Corporate Communications, Isaac Okoroafor, the apex financial institution supplied over $100 million per week for the 2 classes of greenback customers talked about above.

READ: Covid-19: Timeline of every pronouncement made by Nigeria to support the economy

April 27, 2020

CBN adjusted the alternate price for import duty payment from N326/$ to N361/$.

With that growth, the Nigeria Customs Service (NCS) was directed to impact a rise in responsibility payable on cargoes imported by the ports.

March 27, 2020

Central Bank of Nigeria (CBN), in a observe issued to Bureau De Change operators (BDCs) within the nation, suspended the gross sales of international foreign money for 2 weeks.

However, it didn’t have an effect on greenback transactions within the Investors & Exporters (I&E) window. Thus, portfolio buyers, in addition to companies that also required FX for international transactions settlement, may entry the I&E window.

March 24, 2020

The CBN introduced it was collaborating with the Nigerian Financial Intelligence Unit (NFIU) to uncover speculation and would cost such sellers for financial sabotage. The financial institution added that market fundamentals didn’t help devaluation.

March 22, 2020

The Central Bank of Nigeria (CBN) halted the sale of {dollars} to the Nigerian National Petroleum Commission (NNPC) by oil companies, together with International Oil Companies (IOCs) that operated inside the shores of the nation.

The apex financial institution defined that the transfer to cease the sale of {dollars} was in step with its dedication to bettering international alternate provide to the economic system because the impression of the novel Coronavirus (COVID-19) pandemic bit more durable on the economic system.

READ: Nigeria, only oil producing nation that does not benefit from price increase – Sanusi

March 20, 2020

Central Bank of Nigeria devalued its official exchange rate from N307/$1 to N360/$1. The apex financial institution mirrored this transformation on its web site, signaling a affirmation.

March 10, 2020

The Central Bank of Nigeria (CBN) fined Bureau De Change (BDC) operators over numerous infractions within the international alternate market.

Over 100 BDC operators have been fined N5 million every for numerous infractions within the international alternate market.

READ: Report accuses World Bank of ‘toying’ with Nigeria over $1.5 billion loan

March 12, 2020

The Central Bank of Nigeria (CBN) debunked speculations making the rounds that instructed that the naira was lastly about to be devalued.

According to a statement, the apex financial institution blamed “unscrupulous players in the foreign exchange market” for spreading the hearsay.

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