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CBN allows IOCs to sell 50% of repatriated export proceeds to authorized foreign exchange dealers

The Central Bank of Nigeria (CBN) has announced that international oil companies (IOCs) can sell 50% of the balance of their repatriated export earnings to authorized foreign exchange traders.

This is according to a new circular issued on May 31, 2024 to clarify a recent directive and aims to bolster liquidity and stabilize the foreign exchange (FX) market.

The circular provides critical information following its initial publication on May 6, 2024, which generated numerous queries regarding the specific details of foreign exchange sales by IOCs in the Nigerian foreign exchange market.

Key highlights of the circular

  • Sale of repatriated export proceeds: The CBN has authorized IOCs to sell 50% of their repatriated export proceeds directly to authorized foreign exchange dealers or eligible users of foreign exchange for eligible transactions. This measure is expected to significantly increase the availability of foreign currency in the market, thus contributing to the stabilization of the exchange rate.
  • Flexibility in fund management: Additionally, if an IOC has no outstanding financial obligations to settle with the repatriated funds during or after the 90-day holding period, it is permitted to sell the remaining 50% in its entirety to authorized distributors. This provision ensures that IOCs can efficiently manage their currencies without unnecessary restrictions, promoting better liquidity management.

The circular said: “After the publication of the circular dated May 6, 2024, reference is made: TED/FEM/PUB/FPC/001/008, With respect to the pooling of cash by banks on behalf of IOCS, we received several requests for clarification on point 3(8) on foreign exchange sales on the Nigerian Foreign Exchange Market.

“Consequently, we make the following clarifications.

The news continues after this announcement.






The news continues after this announcement.




“(1) The balance of 50% of repatriated export earnings may be sold to authorized dealers or eligible users of foreign exchange with eligible transactions.

“(2) If the IOC has no financial obligation to liquidate the funds during or after the 90-day holding period, the 50% balance may also be sold in full as indicated in point (1) above.”

What you should know

The main bank before prevented IOCs operating in Nigeria from immediately remitting 100% of their foreign exchange earnings to their parent company.advertisement.

According to the initial circular, IOCs are only allowed to immediately repatriate 50% of their income, while the other 50% will be repatriated 90 days after the day of entry.

In addition, it issued clarifications on the use of foreign exchange earnings by IOCs.

The new leadership of the CBN is about to have a significant impact on the Nigerian foreign exchange market. By allowing IOCs to sell a substantial portion of their repatriated profits, the directive aims to increase foreign exchange liquidity, helping to mitigate volatility and foster a more stable economic environment.

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