The Central Bank of Nigeria (CBN) has announced a new guideline for Deposit Money Banks (DMBs) regarding the deposit of foreign currency notes. According to the circular issued by the Director of Currency Operations, Mohammed Solaja, each bank is allowed a maximum daily deposit of $10 million in US$100 and US$50 notes. For smaller denominations of $20 notes and below, the maximum daily deposit is set at $1 million.
The deposits can only be made at the CBN branches in Abuja and Lagos, and the banks must notify the CBN in writing at least three working days in advance. The CBN has also specified that the deposits must be made through CBN-registered Cash in Transit (CIT) companies.
The move is aimed at deepening the foreign exchange market, boosting liquidity, and achieving convergence in the exchange rates of the parallel and official markets. The CBN will credit the DMBs’ accounts through their offshore correspondent banks within five working days, and a handling charge of 0.30% of the authenticated amount will be recovered from the DMBs’ current account with CBN.
The new guideline is a response to the increasing demand by DMBs to deposit their excess foreign currency notes with the CBN for onward credit to their offshore accounts with correspondent banks. The CBN will not accept forex deposits from any DMB that fails to comply with the guidelines.
This development is expected to improve the liquidity of foreign exchange in the market and reduce the pressure on the naira. It is also a step towards achieving the CBN’s goal of converging the exchange rates in the parallel and official markets.
CBN HQ Abuja Nigeria
