Thursday, August 6, 2015

Nigeria bans foreign currency cash deposits

Nigeria's central bank has banned the acceptance of foreign currency cash deposits by commercial banks in order to stem illicit financial flows, the bank said late on Wednesday.

Commercial banks had already started to either cap or ban such deposits last week due to the unavailability of outlets that could absorb their cash.

"For the avoidance of doubt, only wire transfers to and from Domiciliary Accounts are henceforth permissible," the central bank statement added.

A domiciliary account allows an individual or business to make transfers and save directly in British pounds, euro or dollars from within the Nigerian banking system.

Communications advisor to the central bank governor, Ugo Okoroafor, added that the move was also aimed at curbing the "increasing dollarisation of the economy".

Nigeria's currency, the naira, dropped sharply in July to around 240 against the dollar in the parallel market versus the official rate of 197 on the back of persistent dollar shortages.

Central Bank Governor Godwin Emefiele said last month that the naira, which has lost around 15 percent against the dollar over the past year, with an official devaluation in November and a de facto one in February, was "appropriately priced" at its current level.


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