The Central Bank of Nigeria (CBN) has ordered banks to sell not less than 60 per cent of foreign exchange (forex) to manufacturers for importation of their raw materials, plants and machinery.
This is contained in a circular by W D Gotring, the acting Director, Trade and Exchange Department, to all authorised dealers and the general public.
The apex bank, in a circular entitled, “Foreign exchange sales to end users”, lamented that “it has been noticed that negligible proportion of the foreign exchange sales are being channeled towards the importation of raw materials for the manufacturing sector.”
In order to address the imbalance, CBN then directed the authorised dealers to “henceforth dedicate at least 60 per cent of their foreign exchange purchases from all sources ( interbank inclusive) to end users strictly for the purposes of importation of raw materials, plants and machinery. The balance of 40 per cent should be used to meet other trade obligations, visible and invisible transactions.”
The apex bank equally reminded the authorised dealers to “continue to publish weekly sales of foreign exchange to end users in national newspapers and to render statutory returns on same to the CBN promptly.”
In a related development, the apex bank has frowned at ongoing practice in which some authorised dealers buy and sell forex without appropriate documentation.
The forex traded, referred to as “free fund”, is in contravention of the provisions of previous CBN guidelines.
Gotring, the apex bank’s acting Director, Trade and Exchange Department, said: “Authorised dealers are to note that dealing in foreign exchange without appropriate documentation, which includes relevant entries, blotters, physical documents and non-disclosure to the regulatory authorities is a breach of extant regulations.
“The CBN, therefore, reiterates that, as provided in the laws and regulations governing dealings in foreign exchange, authorised dealers shall not sell foreign exchange without appropriate documentation and disclosure to the regulatory authorities irrespective of the source of such funds.
“Accordingly, authorised dealers shall deal in eligible transactions only and not to engage in any foreign exchange transactions on terms inconsistent with the extant laws and/or regulations.”