The Central Bank of Nigeria (CBN) has recently released updated directives for Deposit Money Banks (DMBs) regarding the deposit of foreign currency notes with the apex bank.
The guidelines, as outlined in a circular by the Director of Currency Operators, Mohammed Solaja, aim to regulate and streamline foreign currency deposits.
“In order to deepen the foreign exchange market, boost liquidity, and achieve convergence in exchange rates between parallel and official markets, the Central Bank of Nigeria (CBN) has authorized DMBs to deposit excess foreign currency notes at CBN branches in Lagos and Abuja,” the circular stated.
The CBN specified that each bank can deposit a maximum of $10 million in USD 100 and USD 50 notes daily at the designated branches. This move comes in response to the growing demand from DMBs to deposit foreign currency cash with the CBN for subsequent credit to their offshore accounts with correspondent banks.
To facilitate this process, DMBs are required to inform the CBN in writing of their intention to make such deposits at least three working days in advance. Additionally, the directive sets a daily limit of $1 million for smaller denominations of $20 notes and below to ensure efficient handling of foreign currency transactions.
These new guidelines aim to enhance market stability, increase liquidity, and promote transparency in foreign currency operations within the Nigerian banking sector.
