US dollar battle continues in the world’s largest black nation
The cumulative cash deposit customers can make into their USD accounts has been revised to a maximum of $10,000 (USD) monthly. While you will be able to make multiple cash deposits within the month, the total cash deposit will be capped at $10,000 (USD) in any calendar month. This takes effect from Monday, 23 August 2021 in Stanbic IBTC and most Nigerian banks.
The Central Bank had earlier this year reduced the amount of US dollars customers can pay into their domiciliary accounts from the previous $10,000 to $5,000 monthly.
The latest policy reversal is part of the efforts by the Nigerian Government to slow down the rapid slide of the local Naira currency.
The foreign exchange policy somersault also reflects the divergent inclinations of the various interest groups and power brokers in the Nigerian socio-political ecosystem.
The Central Bank of Nigeria (CBN) in March 2021 had introduced the Naira 4 Dollar promo that allowed beneficiaries of diaspora remittances to get an extra N5 for every $1 received.
The scheme was to ensure that remittance flows and diaspora investments become a significant source of external financing for the nation, given the wild swings in the oil market, Nigeria’s main source of income.
The official dollar exchange rate in Nigeria was N192 to $1 in 2015. It went up by 32% the following year to 253 and by 2020, it had jumped to 358. Today the official rate is almost 420 but the parallel market where most people buy has the dollar trading at almost 515 to the US dollar and 410 to the Canadian dollar.
It’s party time for Nigerians in the diaspora. For as little as $2000 they are already millionaires in the local currency. For Nigerians remitting money abroad for school fees and other expenses, it’s a different dance.