The Central Bank of Nigeria (CBN) has announced that International Oil Companies (IOCs) can sell 50% of their repatriated export proceeds to authorized forex dealers,Daily Trust reports.
This announcement was detailed in a circular issued on Friday, signed by W.J. Kanya, director of the trade and exchange department.
On February 14, the CBN imposed limits on the transfer of proceeds from crude exports by IOCs to their offshore parent company accounts, citing the impact on liquidity in the domestic foreign exchange market. Due to ongoing foreign exchange market reforms, the CBN deemed it necessary to implement measures to address this issue.
According to the CBN, banks can transfer only 50% of repatriated export proceeds to IOCs’ offshore parent company accounts, with the remaining 50% to be repatriated after 90 days.
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On May 6, the financial regulator reviewed the directive on the repatriation of export proceeds. The revised directive allows IOCs to repatriate 50% of their export proceeds immediately or when needed, while the remaining 50% can be used to settle financial obligations within Nigeria.
In a new development, the CBN clarified the directive following the release of a circular dated May 6, 2024 (referenced TED/FEM/PUB/FPC/001/008) regarding cash pooling by banks on behalf of IOCs. The apex bank stated that the 50% balance of repatriated export proceeds may be sold to authorized dealers or eligible foreign exchange users with qualifying transactions.
Additionally, if the IOC has no financial obligations to settle with the funds during or after the 90-day retention period, the 50% balance may be sold entirely as stipulated.
