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    Nigeria extends Naira for dollar scheme as foreign currency reserve rises

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    The Central Bank of Nigeria (CBN) has extended the Naira for dollar scheme till further notice, saying all aspects of the operationalisation of the programme remain the same.

    This was disclosed in a letter to all deposit money banks, International Money Transfers Operators (IMTOs), and the general public dated May 5, 2021, and signed by A.S Jibrin for the director, trade, and exchange department, CBN.

    The Naira for dollar scheme was originally scheduled to end on May 8, 2021. “We hereby announce the continuation of the scheme until further notice,” the circular stated.

    On March 6, 2021, the CBN introduced the Naira 4 dollar scheme as an incentive to boost inflows of diaspora remittances into the country.

    The new policy on remittances flows by the lender of last resort, which offers to reward recipients of diaspora remittances is expected to reduce costs and check roundtripping, according to the regulator.

    Godwin Emefiele the CBN governor had explained that the move was also to increase the transparency of remittance inflows and reducing rent-seeking activities., even as he expressed optimism that the new policy measure will encourage banks and financial institutions to develop products and investments vehicles, geared towards attracting investments from Nigerians in the diaspora.

    Meanwhile Nigeria’s foreign reserves gained $620 million from diaspora remittances in two weeks, the foreign exchange reserves jumped to $35.026 billion, a data from the Central Bank of Nigeria (CBN) has shown.

    The accretion, the highest in over a month, has been attributed to a rise in remittance inflows following incentives introduced by the apex bank for dollars received in Nigeria under the ‘Naira for Dollar’ policy.

    The rise in forex reserves was also traced to steady high global liquidity and fund flow into the economy.

    The flow is expected to witness a relatively higher growth for Nigeria after the recent exit from recession.

    CBN Governor Godwin Emefiele said the ‘Naira for Dollar’ scheme gives N5 rebate for every $1 sent by Nigerians in diaspora to the country. The money is paid directly to the account of the beneficiaries, following receipt of the remittance inflows.

    Previous foreign reserves movement showed that, on April 1, the reserves stood at $34.85 billion, representing $404 million increase compared to $34.41 billion on March 11.

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