CBN to stop sale of foreign exchange to banks by end of 2022, days after IMF ask it to abandon exchange rate

CBN to stop sale of foreign exchange to banks by end of 2022, days after IMF ask it to abandon exchange rate

  • The Central bank of Nigeria has announced plans to stop the sale of forex to commercial banks by year-end
  • This is coming seven months after it took a similar step against Bureau de Change operators resulting in Naira falling to as low N600 to a dollar
  • The international monetary fund had a few days ago asked CBN to abandon the use of the official exchange rate for a transaction

The Central Bank of Nigeria (CBN) has indicated that it would discontinue the sale of foreign exchange to Deposit Money Banks (DMB) by the end of the year.

This is as the apex bank has said that the banks must begin to source their forex from export proceeds, hence the need to support the non-oil sector of the economy, Channels Tv reports.

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CBN Governor, Godwin Emefiele, made this known at the end of 364th Bankers Committee meeting on Thursday, February 10, 2022.

CBN to stop sale of foreign exchange to banks by end of 2022, days after IMF ask it to abandon exchange rate
CBN Governor, Godwin Emefiele Credit: CBN
Source: Facebook

The meeting was also designed for the launch of the CBN new forex repatriation scheme ‘RT200 FX Programme’.

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What is RT200 FX Programme’

The RT200 FX Programme which stands for the “Race to US$200 billion in FX Repatriation”, is a set of policies, plans and programmes for non-oil exports that will enable Nigeria attain a lofty yet attainable goal of US$200 billion in FX repatriation, exclusively from non-oil exports, over the next 3-5 years. 

Emefiele on dollar sale to commercial banks

According to CBN Governor is makes no more sense for banks to always rush to it for dollars to meet demands when they can generate their own from export proceeds.

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He said:

“The era is coming to an end when, because your customers need 100million dollars in foreign exchange or 200 million dollars, you now want to pack all the dollars and pass it to CBN to give you dollars."
“It is coming to an end before or by the end of this year. We will tell them don’t come to the Central Bank for foreign exchange again go and generate their export proceeds."
“When those export proceeds come, we will fund them at 5% for you and they will earn rebait. Then you can sell those proceeds to your customers that want 100 million dollars. But to say you will continue to come to the Central Bank to give you dollars, we will stop it."
“Nigeria cannot continue to depend on FX earnings to fund its import obligations from revenue coming from earnings from products where we cannot determine both price and quantity"

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As word of the latest action spread, black market dealers wasted no time in weakening the Naira further to N580 per dollar on Thursday evening.

N580 for a dollar at the black market is the lowest since the CBN stopped selling dollars to BDC operators Premiumtimes reports.

IMF calls on Nigeria to abandon official exchange rate had earlier reported that the International Monetary Fund is asking Nigeria to ditch the official exchange rate.

According to the IMF, the use of the official exchange rate is hurting the economy of Nigeria and asked the CBN to review its policies.

IMF also called for the Nigerian government to do away with fuel subsidy and use the funds in building infrastructure.


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