JUST IN: CBN Issues New Forex Guidelines, Abolishes Multiple Exchange Rate Window

In a significant development, the Central Bank of Nigeria (CBN) has released new guidelines for operations in the Nigerian Foreign Exchange (FX) Market.

These guidelines include the abolition of segmentation and the cessation of the Naira for dollar scheme and RT200 rebate scheme, effective from June 30, 2023.

Angela Sere-Ejembi, the Director of Financial Markets at CBN, confirmed these changes in a statement on Wednesday night.

Under the new guidelines, all segments in the FX market have been collapsed into the Investors and Exporters (I&E) window.

This move aims to streamline operations and create a more efficient foreign exchange market. Additionally, the CBN has reintroduced the “Willing Buyer, Willing Seller” model at the I&E Window, as per the circular issued on April 21, 2017, referenced FMD/DIR/CIR/GEN/08/007. This model allows eligible transactions to access foreign exchange at the I&E Window.

The decision to cease the Naira for dollar scheme and RT200 rebate scheme signifies a shift in the CBN’s foreign exchange policies. The Naira for dollar scheme was introduced in March 2020 to encourage diaspora remittances by offering an incentive of five Naira for every one dollar received. Similarly, the RT200 rebate scheme provided a 200 Naira rebate for every dollar received through the International Money Transfer Operators (IMTOs).

While the exact reasons for these changes were not explicitly stated, the CBN’s move suggests a strategic adjustment to the foreign exchange policies to align with evolving market dynamics and enhance operational efficiency. The consolidation of segments and the reintroduction of the “Willing Buyer, Willing Seller” model are expected to promote transparency and ensure fair market pricing.

The CBN has clarified that applications for specific purposes such as medicals, school fees, Business Travel Allowance (BTA), Personal Travel Allowance (PTA), and Small and Medium Enterprises (SMEs) transactions will continue to be processed through deposit money banks. This ensures that essential transactions are still facilitated within the foreign exchange market.

As the new guidelines come into effect on June 30, 2023, market participants, authorized dealers, and the general public are urged to familiarize themselves with the changes and adjust their operations accordingly. The CBN remains committed to maintaining a stable foreign exchange market and promoting economic growth in Nigeria.