Nigerian Banks Must Source Foreign Currency Themselves as CBN Plans to Stop Selling Currency to Banks

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has announced that the CBN will stop selling foreign exchange to depository banks by the end of 2022.

The CBN Governor made this known during a press briefing at the launch of the bank’s new currency repatriation program, RT200, which was held after the Banking Committee meeting on Thursday, February 10, 2022 in Abuja, the capital of Nigeria.

RT200 stands for Race to $200bn, and is a set of policies, plans and programs for non-oil exports that would enable the country to generate $200 billion in foreign exchange repatriation, exclusively from non-oil exports, over the next 3 to next 5 years, said the head of the apex bank.

CBN Governor Godwin Emefiele noted that “Nigerian banks need to start sourcing foreign exchange from export earnings,” hence the need to support the country’s non-oil exporters.

He said the decision was in line with the apex bank’s new commitment to increase the country’s foreign exchange reserves through non-oil export proceeds.

“Today we are also announcing the introduction of the Non-Oil FX Rebate Scheme: a special local currency rebate program for non-oil exporters of semi-finished and finished products, who present verifiable evidence of repatriation of proceeds from ‘export sold directly into the I&E window to boost liquidity in the market’, said Emefiele.

“Under the program, which is to come into effect immediately, the apex bank will provide soft, long-term loans to businessmen who wish to expand existing factories or build new ones for the sole purpose of add significant value to non-oil raw materials before exporting them.

“These loans will have a term of 10 years, with a moratorium of two years and an interest rate of 5%”, he added.

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Similar to the naira for dollar scheme, the scheme would also involve a currency reimbursement system where exporters would be paid N5 for every dollar invested in the economy.

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