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CBN grants IOCs approval to sell 50% repatriated export proceeds

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The Central Bank of Nigeria (CBN) has announced that international oil companies (IOCs) are now permitted to sell 50 percent of their repatriated export proceeds in the Nigeria Foreign Exchange Market.

This decision, contained in a circular signed by its Director of the Trade and Exchange Department, W.J. Kanye, is a reversal of previous limits placed on the transfer of proceeds from crude exports by IOCs to offshore parent company accounts on February 14.

The CBN cited the impact of these transfers on liquidity in the domestic foreign exchange market as a reason for the initial restrictions.

However, due to ongoing reforms in the foreign exchange market, the CBN says it has deemed it necessary to adjust the measures.

It said banks are now authorized to transfer 50 percent of repatriated export proceeds on behalf of IOCs to their parent company offshore accounts, with the remaining 50 percent to be repatriated after 90 days.

Additionally, the CBN revised its directive on the repatriation of export proceeds on May 6, allowing IOCs to repatriate 50 percent of their export proceeds immediately or as needed, while the remaining 50 percent can be used to settle financial obligations in Nigeria.

The circular dated May 06, 2024, read in parts, “in respect of Cash Pooling by banks on behalf of IOCs, we received several requests for clarification on item No 3(8) on forex sales at the Nigeria Foreign Exchange Market.

“Providing more clarifications, the apex bank said the “50% balance of the repatriated export proceeds may be sold to Authorized Dealers or eligible users of foreign exchange with eligible transactions.”