The Central Bank of Nigeria (CBN) has issued new guidelines for Deposit Money Banks (DMBs) regarding the deposit of foreign currency notes with the apex bank.
These guidelines were released in a circular by the Director of Currency Operations, Mohammed Solaja, and posted on the CBN’s website on Friday.
According to the CBN, each bank can deposit up to $10 million in $100 and $50 notes daily at the CBN branches in Abuja and Lagos. This measure aims to deepen the foreign exchange market, boost liquidity, and align the exchange rates between the parallel and official markets.
“In order to deepen the foreign exchange market, boost liquidity and attain convergence in the exchange rates of the parallel and official markets, the Central Bank of Nigeria (CBN) has approved that DMBs may deposit their excess foreign currency notes with Lagos and Abuja branches of the bank,” the circular stated.
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The circular, identified by reference number COD/DIR/INT/CIR/001/016, also mandates that DMBs notify the CBN in writing at least three working days before making such deposits. Additionally, deposits of smaller denominations, such as $20 notes and below, are limited to $1 million daily.
The CBN noted that this approval responds to the increasing demand by DMBs to deposit their forex cash with the CBN for onward credit to their offshore accounts with correspondent banks.