In this article, we discuss the potential effect of the new circular in respect of the CBN policy on diaspora remittances.
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According to the CBN, some IMTOs and unlicensed companies continue to facilitate diaspora remittances into the country in Naira, in clear contravention of the CBN directive that all remittances be paid to beneficiaries in dollars. The CBN stated categorically in the new circular that:. Only licensed IMTOs are permitted to carry on the business of facilitating diaspora remittances into Nigeria.
The CBN stated in the circular that the measures were intended to promote transparency, grow diaspora remittances, and significantly improve foreign exchange inflows into Nigeria. For unauthorized operators, the proposed sanction is to mandate the closure of their accounts in Nigerian banks, and bar them from accessing banking services in Nigeria.
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This circular rehashes the earlier stance of the apex bank on diaspora remittances in Nigeria. We have examined the impact of the CBN policy in our previous article. The CBN, being the apex bank has thus risen to the responsibility of increasing the amount of foreign currency in circulation.
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However, despite the efforts by the CBN to increase liquidity in the foreign exchange market through its new policy on diaspora remittances, reports continue to show that there has been a lot of pressure on the foreign exchange market, thereby leading to a decline in the availability of foreign currency. Also, many of the operators are hoarding Dollars, thereby leading to scarcity of foreign currency in circulation. It is therefore hoped that the strict punitive measures imposed by the CBN will increase compliance by all stakeholders and ultimately lead to an increase in the availability of foreign currency within the country.
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The CBN has promised continued monitoring of developments concerning compliance with its policy on diaspora remittances. It is hoped that these different developments will achieve the set objectives by the CBN, including the stability of the foreign exchange market and valuation of the Naira.
Modalities for Payout of Diaspora Remittances". Supra note 2. Supra note 3. Articles from Aelex.
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Related News. Forex Trading: Prospects for the Nearest Future. Comments This circular rehashes the earlier stance of the apex bank on diaspora remittances in Nigeria. Conclusion The CBN has promised continued monitoring of developments concerning compliance with its policy on diaspora remittances. Footnotes 1.
Modalities for Payout of Diaspora Remittances" 4. Supra note 2 5.
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March 08, Some of these reasons are articulated below:. Download full article here. Andersen In Nigeria. Publications Articles Newsletters Documents. A Review of the recent CBN Directive on Form M Issuance from a Transfer Pricing Perspective September 8, Following the drop in global crude oil prices and the economic shutdown caused by the COVID pandemic, economies across the globe have been significantly impacted, leading to creative approaches to managing the situation for immediate survival and possible economic recovery.
Some of these reasons are articulated below: Download full article here.