CBN Direct Banks to Allocate 60% of Their FX to Manufacturing Companies

Godwin Emefiele5

By InvestAdvocate

Lagos (INVESTADVOCATE)-The Central Bank of Nigeria (CBN) on Tuesday directed banks to allocate 60 percent of their foreign exchange purchases to manufacturers, in order to help them pay for imports and boost the economy.

This is contained in a circular with reference number TED/FEM/FPC /GEN/01/007 dated August 23, 2016 and signed by W.D, Gotring, acting director, Trade & Exchange Department of the CBN.

“Authorised dealers (banks) are hereby directed to dedicate at least 60 percent of their total foreign exchange purchases from all sources to end-users strictly for the purposes of importation of raw materials, plant and machinery,”

According to the CBN, the balance of 40 percent should be used to meet other trade obligations, visible and invisible transactions.

The CBN has in June, removed its currency peg to the dollar, allowing the naira to weaken by 40 percent in a bid to attract more foreign investment.

The naira on Tuesday in the interbank market – had appreciated against all the three currencies, according to Cordros report. It said the local currency appreciated by 1.15 percent to the dollar, 1.43 percent to the pounds sterling and 4.35 percent to the euro to trade at N305.18, N415.26 and N356.74 respectively.

In the parallel market, the naira declined 0.25 percent to the dollar, 0.39 percent to British pounds and 0.68 percent to euro to trade at N397.00, N512.00 and N445.00 respectively.

Click here to view circular

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