New FX Rule To Begin Aug 1 – CBN
The Central Bank of Nigeria has announced that the provisions of the revised Foreign Exchange Manual shall take effect from August 1,2018.
A circular to Authorized dealer banks and the public, signed by the Director, Trade and Exchange at the CBN, F..O Okonji said the bank noted that the changes made in the manual were aimed at streaming documentation requirements, enhancement of transparency of transactions and engendering compliance by stakeholders.
Part of the guideline stipulates that CBN shall operate a single market structure through the autonomous/inter-bank market, including the Inter-Bank Foreign Exchange Market with the CBN participating in the FX market through interventions directly in the inter-bank market or through dynamic “Secondary Market Intervention Mechanisms”.
Furthermore, to promote the global competitiveness of the market, CBN said the inter-bank FX market will be supported by the introduction of additional risk management products offered by the CBN and Authorised Dealers to further deepen the FX market, boost liquidity and promote financial security in the market.
This Foreign Exchange Manual is compiled and issued by the Central Bank of Nigeria (CBN) pursuant to the powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act of 1995.
The Manual is intended as a guide to Authorized Dealers in processing foreign exchange applications for their customers.
“This edition has been revised in line with the provisions of the Act of 1995 and therefore, supersedes all other editions and amendments issued prior to the date of this publication,” the bank noted.
The President of the Association of Bureau de Change of Nigeria ( ABCON) said the changes were essentially designed to be relevant to the modern day reality.
Gwadane said: “You would recall that before the review, penalties were not commensurate with the kind of crimes committed in The market.
“The punishments for infringement now extend to the owners, that is the directors of these firms to ensure proper corporate governance oversight.”
Gwadabe however said, the retention of $5000 dollars as maximum limit for Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) for school fees, medical etc which the BDCs are expected to report has pushed high volume transactions to the parallel market where they are consummated with nobody reporting back to the CBN.
“Today, they can change $1 million dollars without reporting to the regulators.” He added.
Onyeaka Ijeoma, an Analyst with Vetiva Research said: they were not sweeping changes as such.
“The amendment were designed to accommodate the Import and Export ( I&E) window.