ANNOUNCEMENT 05 Aug 2015In August 2015, the government of Nigeria announced a rule change for commercial cross-border financial flows.
NUMBER OF INTERVENTIONS
Central Bank of Nigeria, Trade and Exchange Department, 'Developments in the foreign exchange market. Re: cash deposits into domiciliary accounts', circular reference TED/FEM/FPC/GEN/01/015 of 5 August 2015: http://www.cenbank.org/Out/2015/TED/TED.FEM.FPC.GEN.01.015.pdf
Julia Payne and Oludare Mayowa, 6 August 2015, 10:29am EDT, 'UPDATE 2-Nigeria cbank acts to curb speculation and support naira', Reuters: http://www.reuters.com/article/2015/08/06/nigeria-currency-idUSL5N10H2FK20150806
Ludovica Iaccino, 7 August 2015, 16:58 BST, 'Nigeria's ban of foreign currency deposits 'good for economy and naira'', International Business Times: http://www.ibtimes.co.uk/nigerias-ban-foreign-currency-deposits-good-economy-naira-1514544
On 5 August 2015, the Central Bank of Nigeria (CBN) prohibited commercial banks to accept deposits of foreign currency cash. The policy was published in a circular by the CBN's Director of the Trade and Exchange Department, Olakanmi I. Gbadamosi. Account holders which made a foreign currency deposit prior to the announcement by the CBN, are advised to withdraw their amount in the foreign currency or naira equivalent.
The CBN stated that the measure is supposed to counter illicit financial flows in the Nigerian banking system. The Nigerian government is impeding access to USD since mid-2015. The goal of its strict monitoring of cash flows is to avoid foreign currency reserves to deplete as oil prices are falling. Crude oil exports represent Nigeria's main source of US Dollars. The policy is also connected to the government's national development plan which emphasizes import substitution, i.e., the protection of local businesses from international competitors.
For similar policies on currency devaluation in Nigeria, please consult the entries under Related Measures.