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Nigerian banks can now trade with deposited FX

Published

2 weeks ago

November 7, 2024

The Central Bank of Nigeria has announced a free foreign exchange deposit window for banks in the country with instructions on how to implement it.

The procedures for commercial, merchant, and non-interest banks to join the programme were outlined in the rules that the CBN published on Tuesday.

John Onojah, the acting director of the Financial Policy and Regulation Department, and Dr. Adetona Adedeji, the acting director of the Banking Supervision Department, jointly signed the notice of the scheme guidelines, which go into effect on Wednesday.

The “Guidelines On Implementation Of The Foreign Currency Disclosure, Deposit, Repatriation And Investment Scheme, 2024” paper states that banks are free to deal with the foreign exchange that scheme participants make available.

“Commercial, merchant, and non-interest banks may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed.

“Interest payment by CMNIBs on the balance in the designated domiciliary account shall be in line with relevant provisions of the Guide to Charges by Banks and Other Financial Institutions in Nigeria,” part of the guidelines read.

The Nigerian government recently announced a nine-month scheme that will allow people to deposit dollar bills held outside of the official banking system without being scrutinised. The program will start on October 31, 2024.

In its most recent instructions, the apex bank also said that banks must request information such as a Tax Identification Number (for legal people) or a Bank Verification Number and National Identification Number (for natural persons and directors of incorporated businesses).

The applicant’s designated domiciliary account details, the amount of the ITFC to be deposited, and any other information the bank may occasionally need are among the other criteria.

Additionally, the CBN insisted that banks not violate anti-money laundering, anti-terrorism financing, and anti-proliferation financing rules and regulations.

Related Topics:Featured Foreign exchange Nigeria

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IMF mission concludes 4th loan program assessment in Egypt

Published

23 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.