Naira closes at N485 against dollar as CBN clarifies on receipt of diaspora remittances

Nigeria’s currency on Wednesday strengthened by 1.02 percent or N5 day- on- day to N485 to the dollar compared to N495 on Tuesday on the black market.

With the Wednesday’s closing rate, naira has gained 4.9 percent or N25 against the dollar, stronger than N510/$ exchanged on Monday, lowest since 2017.

Also, the Central Bank of Nigeria ( CBN) on Wednesday clarified on the procedure for receipt of diaspora remittances, saying International Money Transfer Operators (IMTO) must ensure that all funds in favour of beneficiaries/ recipients in Nigeria are deposited into the Agent Banks‘ correspondent account.

Ozoemena Nnaji, director, trade and exchange department, stated this in a circular titled, “Re: Amendment to Procedures for receipt of Diaspora Remittances”.

According to the circular, Agent Banks (Deposit Money Banks) in Nigeria will be responsible for all payment to beneficiaries/ recipients either in foreign currency cash (USD) or into the beneficiaries’/ recipients’ domiciliary account in Nigeria.

“The mode (if payment either in cash or transfer is at the sole discretion of the beneficiaries/ recipients,” the circular reads.

At the Bureau De Change ( BDC) segment of the foreign exchange market, naira remained stable at N495 per dollar on Wednesday, after appreciating by N5 from N500 traded on Monday.

At the Investors and Exporters (I&E) forex market, naira depreciated further by 0.25 percent as the dollar was quoted at N395.00 as against the last close of N394.00.

Mos t participants maintained bids between N380.00 and N396.00 per dollar as noted by analysts at FSDH research.

Trade settled flat at the treasury bills market, amid record-low yields, as investors wait on the sidelines in anticipation of CBN special bills aimed at releasing excess Cash Reserve Ratio ( CRR) of banks to boost system liquidity and support credit creation.

The CBN on Wednesday introduced a special 90 days tenor special treasury bill with zero coupon as part of efforts to deepen the financial markets.

As a result, the subdued sentiment kept the market unchanged for the third session this week at 0.1 percent average yield, according to a report by Greenwich Merchant Bank.

Meanwhile, the financial system liquidity expanded by 140.0 percent to open at a robust position of N617.43bn compared to N257.31 billion yesterday, keeping funding rates pressured.

Precisely, Open Buy Back eased to 0.7 percent from 0.8 percent but Over Night rate steadied at 1.0 percent.