The Central Bank of Nigeria (CBN) has recently announced the lifting of limits on domiciliary accounts, bringing about significant changes to the country's foreign exchange market.
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In a statement released on Sunday, the CBN outlined the new regulations, granting account holders unrestricted access to their funds and enabling them to freely deposit and withdraw money. Under the revised policy, individuals can make daily withdrawals of up to $10,000.
The CBN's statement, titled 'CBN issues further guidance on operational changes to foreign exchange market,' emphasized that ordinary domiciliary account holders now have full control over their accounts without any restrictions.
Furthermore, they are allowed to utilize cash deposits up to $10,000 per day, either directly or through telegraphic transfers. However, the CBN requires deposit money banks (DMBs) to submit transaction reports to the central bank, including the purpose of the transactions.
The new policy marks a departure from the previous restrictions placed on transfers from domiciliary accounts, which came into effect earlier this year.
Banks had previously limited the maximum amount that could be transferred from cash deposits to $5,000 per month. However, following a Bankers' Committee meeting, the CBN decided to revise and relax these limits.
The CBN's objective behind these changes is to enhance transparency, liquidity, and price discovery within the foreign exchange market. By improving the supply of foreign exchange, discouraging speculation, and fostering customer confidence, the CBN aims to achieve overall stability in the market.
In addition, the statement highlights that all types of visible and invisible transactions, such as medical expenses, school fees, business travel allowances (BTA), personal travel allowances (PTA), remittances, and airline transactions, are eligible for the Investors' and Exporters' window.
The CBN has urged banks to promptly process eligible invisible transactions on behalf of their customers, utilizing the applicable exchange rate at the Investors' and Exporters' window. Furthermore, the CBN has committed to ensuring the orderly settlement of committed foreign exchange forward transactions to enhance market confidence.
In addition to the changes in the foreign exchange market, the CBN plans to normalize its Cash Reserve Ratio maintenance processes, ensuring fair implementation across the banking industry. The central bank also intends to engage stakeholders throughout the ongoing reforms.
These recent developments represent a significant shift in Nigeria's foreign exchange policies, with the CBN taking proactive steps to foster a more transparent and stable market environment while empowering account holders with greater flexibility in managing their funds.
This is actually a welcomed development but I hope they also reduce the bank charges in other to enable customers to utilize it to the fullest because if bank charges should be increased,it won't serve well
Yes you are right. The withdrawal limit and deposit place by Buhari regimen should also be lifted.