On Friday, the Central Bank of Nigeria (CBN) updated its regulations for Deposit Money Banks (DMBs) pertaining to the deposit of extra foreign currency notes at its offices in Lagos and Abuja.
The goal of this project is to bring the official and parallel markets’ currency rates into line. On Friday, the black market rate printed at N1,520, while the official Foreign Exchange (FX) closed at N1,505.30.
The CBN has authorised DMBs to deposit their extra foreign currency notes with the Central Bank, per a circular published on June 27, 2024.
The clearance comes in response to DMBs’ growing request that they deposit their foreign exchange funds with CBN in order to have those funds credited to their offshore accounts with the correspondent banks.
Specific protocols and restrictions for these deposits are outlined in the rules. DMBs must notify the Branch Controller of CBN Lagos or Abuja in writing of their intention to deposit foreign money with a minimum of three working days’ notice. A list of the owners of the foreign currency that has to be deposited must be included with the notification.
CBN sets a $100, $50 maximum deposit of $10 million
Additionally, there are set deposit thresholds. The maximum daily deposit limit for USD notes with higher denominations (USD100 and USD50) is USD10 million, but the maximum daily deposit limit for USD notes with lesser denominations (USD20 and below) is USD1. The maximum daily deposit limit for GBP notes is GBP1 million, and the maximum daily deposit limit for EUR notes is EUR1 million.
In order to witness and verify the amount being deposited, two representatives from the depositing bank must also be present. All denominations of GBP and Euro notes, as well as USD notes in the following denominations: USD100, USD50, USD20, USD10, USD5, USD1. Packaging for each denomination needs to be done in its own box.
Naira falls 1.94% versus the dollar at the month’s end
According to data from the FMDQ Securities Exchange Limited, the dollar completed the month of June at N1,505.30 on Friday, down from N1,476.12 quoted at the beginning of the month, meaning that the naira lost 1.94 percent of its value.
This is in spite of the fact that dollar sales increased, rising from $121.87 million on June 3, 2024, to $187.82 million on Friday, a 54.12% rise.
As the dollar was quoted at N1,520 to end FX trading for the month, as opposed to N1,480 stated at the start of the month, the naira lost 2.63 percent at the parallel market, also referred to as the black market.
