Nigeria’s Central Bank seeks to boost foreign reserve with N5-per-dollar reward for diaspora remittances

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With a drive to iNcrease foreign reserves in Nigeria, The Central Bank of Nigeria (CBN) has introduced a scheme that rewards senders and recipients of international money transfers through CBN licensed International Money Transfer Operators (IMTOs).

External reserves dropped by $1.1bn in February, according to statistics obtained from the Central Bank of Nigeria on Monday.

The reserves which stood at $36.19bn as of February 1 fell to $35.09bn as of February 26.

The Central Bank Governor, Godwin Emefiele, had recently said Nigeria’s external reserves at $35bn was sufficient to finance the country’s seven months’ imports.

The CBN says the “Naira 4 Dollar Scheme” will ensure recipients of Diaspora remittances are paid N5 for every $1US received as remittance inflow.

The scheme takes effect from Monday, March 8, 2021, and ends on Saturday, May 8, 2021.

This was disclosed by CBN in a circular issued to all Deposit Money Banks (DMO) and International Money Transfer Operators (IMTO).

The memo, dated March 5th, 2021, and signed by the Director, Trade and Exchange Department, A.S Jibrin, read in part: “In an effort to sustain the encouraging increase in inflows of diaspora remittances into the country, the Central Bank of Nigeria (CBN) hereby announces the introduction of the “CBN Naira 4 Dollar Scheme,” an incentive for senders and recipients of international Money Transfers.

“Accordingly, all recipients of Diaspora remittances through CBN licensed IMTOs shall henceforth be paid N5 for every USD1 received as remittance inflow.

“In light of this, the CBN shall, through commercial banks, pay to remittance recipients the incentive of N5 for every USD1 remitted by sender and collected by designated beneficiary. This incentive is to be paid to recipients whether they choose to collect the USD as cash across the counter in a bank or transfer same into their domiciliary account.

“In effect, a typical recipient of Diaspora remittances will, at the point of collection, receive not only the USD sent from abroad but also the additional N5 per USD received.

Please note having discussed with banks and IMTOs, the scheme takes effect from Monday 8 March 2021 and ends on Saturday 08 May 2021.”

The letter was addressed to all deposit money banks, international money transfer operators and the general public.

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