One week after introducing the Naira4Dollar scheme, the Central Bank of Nigeria (CBN) introduced its Naira4Dollar scheme, $40 million in foreign remittances might have been raked in.
The CBN received about $40 million last week from remittances up from about $6 million before the policy was introduced.
The latest information suggested the exchange rate between the naira and dollar was N486/$1 higher than the N480/$1 exchanged just before the new policy was introduced.
At $40 million, the CBN would have incurred a cost of about N200 million.
At $40 million a week, the CBN could be attracting about $160 million a month or $1.9 billion per annum.
This will be higher than the estimated $1.1 billion received in 2020 from diaspora remittances but much lower than the $3.2 billion received in 2019.
The central bank captures remittances in its Balance of Payment report, and the Foreign Exchange Flows data.
While the BOP includes non-cash items remitted into Nigeria, the Foreign Exchange Flows Data records cash items only.
Further reports show that commercial banks in Nigeria are automatically opening domiciliary accounts for beneficiaries of diaspora remittances in Nigeria under the CBN’s Naira4Dollar scheme.
As the beneficiary receives the inflows, N5 for every dollar remitted is a credit to the beneficiary’s naira account.
The CBN Naira4Dollar scheme appeared to be recording success since its introduction three weeks ago.
A $40 million a week inflow suggests most of the dollars are either in the domiciliary account of customers or withdrawn and exchanged at the black market.
The CBN believes remittances paid in dollars and sold on the streets will improve the retail end’s liquidity, thus strengthening the exchange rate.