CBN To Stop Sale Of Forex To Banks By End Of 2022 

The Central Bank of Nigeria (CBN) has stated that it will cease selling foreign currency to Deposit Money Banks (DMB) by the end of the year.

iexclusive News Nigeria reports that this is because the apex bank has stated that banks must begin to source their forex from export proceeds, implying the need to support the economy’s non-oil sector.

The CBN Governor, Godwin Emefiele, made this known during a special press briefing at the end of the 364th Bankers Committee meeting on the launch of the bank’s new forex repatriation scheme ‘RT200 FX Programme’ on Thursday February 10, 2022, at its headquarters in Abuja.

The RT200 FX Programme, which stands for the “Race to US$200 billion in FX Repatriation,” is a set of non-oil export policies, plans, and programs that will enable Nigeria to achieve a lofty yet attainable goal of US$200 billion in FX repatriation, entirely from non-oil exports, over the next 3-5 years.

What You Need To Know

Emefiele stated that the decision was in line with the apex bank’s new commitment to increase the country’s foreign reserves through non-oil export proceeds.

“The era is coming to an end when, because your customers need 100 million dollars in foreign exchange or 200 million dollars in foreign exchange, you now want to pack all the dollars and pass it to CBN to give you dollars,” Emefiele said.

“It will end before or by the end of this year.” We will tell them not to come to the Central Bank for foreign exchange again; instead, they should go generate their export proceeds.

“When those export proceeds arrive, we’ll fund them at 5% for you, and they’ll earn rebait.”

Then you can sell the proceeds to your customers who are looking for a hundred million dollars. But if you continue to come to the Central Bank for dollars, we will stop it.

“Nigeria cannot continue to rely on foreign exchange earnings to fund its import obligations from revenue derived from products for which we cannot determine both price and quantity.”

The CBN will provide concessionary and long-term loans for business people interested in expanding existing plants or building new ones for the sole purpose of adding significant value to non-oil commodities before exporting them under the RT200 FX programme, which will go into effect immediately.

These loans will be for ten years, with a two-year moratorium and a 5% interest rate.

During the briefing, the CBN boss stated that the newly launched program will have five key anchors: Value-Adding Exports Facility, Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme, Dedicated Non-Oil Export Terminal, and Biannual Non-Oil Export Summit.

The CBN intends for the new RT200 FX Programme to be similar to the Naira4Dollar scheme for diaspora remittances, which pays diaspora remittance recipients N5 for every $1 received as remittance inflow through CBN’s International Money Transfer Operators.

During the briefing, Emefiele announced the Non-Oil FX Rebate Scheme, a special local currency rebate scheme for non-oil exporters of semi-finished and finished goods who can show verifiable proof of export proceeds.