The Central Bank of Nigeria (CBN) has released new guidelines for Deposit Money Banks (DMBs) regarding the deposit of foreign currency notes. The directive was contained in a circular issued by the Director of Currency Operations, Mohammed Solaja, and posted on the bank's website.
Each bank is allowed a maximum daily deposit of $10 million in USD 100 and USD 50 notes. For smaller denominations of $20 notes and below, the maximum daily deposit is set at $1 million.
Deposits can only be made at the CBN branches in Abuja and Lagos.
DMBs must notify the CBN in writing of their intention to make such deposits at least three working days in advance.
A handling charge of 0.30 percent of the authenticated amount will be recovered from the DMB current account with CBN.
The new guidelines are aimed at deepening the foreign exchange market, boosting liquidity, and attaining convergence in the exchange rates of the parallel and official markets . The CBN's 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 correspondent banks.
The new guidelines are expected to enhance liquidity in the foreign exchange market, reduce speculation, and promote convergence in the exchange rates of the parallel and official markets. The guidelines are also expected to reduce the risk of foreign exchange exposures and promote a more stable and transparent foreign exchange market.
The CBN's new guidelines for foreign currency deposits at commercial banks are a significant step towards promoting a more stable and transparent foreign exchange market. The guidelines are expected to enhance liquidity, reduce speculation, and promote convergence in the exchange rates of the parallel and official markets. DMBs are advised to comply with the guidelines to avoid rejection of forex deposits.