CBN reveals the reason for new FX sourcing guidelines for dealer banks

• The Central Bank of Nigeria (CBN) has asked trader banks to spell done the Pan African Payment System (PAPSS) for FX sourcing
• The slope said the determination was designed to beforehand a hassle-free intra-African trade, boost liquidity and fiscal inclusion
• Experts person said the improvement volition besides payment the naira, which has faced renewed volatility recently

Legit.ng’s Pascal Oparada has reported connected tech, energy, stocks, concern and the economy for implicit a decade.

The Central Bank of Nigeria has said that authorised trader banks tin present root forex independently for the Pan-African Payment and Settlement System (PAPSS) via the Nigerian Foreign Exchange Market (NAFEM), without going done it.

CBN disclosed this successful a connection signed by Hakama Sidi Ali, its Acting Director of Corporate Communications, connected Monday, April 28, 2025, aft unveiling the revised documentation requirements for PAPSS transactions successful the country.

The politician of the Central Bank of Nigeria (CBN), Olayemi Cardoso, leads the slope connected monolithic reforms. Credit: CBN
Source: Twitter

CBN gives reasons for caller directive

The slope said the determination is portion of its ongoing efforts to beforehand a hassle-free intra-African trade, boost fiscal inclusion, and amended operational ratio for Nigerians operating cross-border payments successful Africa.

Under the caller rule, customers operating low-value transactions can present usage basal Know Your Customer (KYC) and Anti-Money Laundering documents already provided to their trader banks.

Individuals transacting up to $2,000 successful naira equivalent and firm bodies up to $5,000 equivalent are eligible for the papers regime.

The afloat suite of documentation is stipulated successful the apex bank’s Foreign Exchange Manual, and associated circulars stay mandatory for transactions exceeding the thresholds.

The fiscal assemblage regulator further clarified that applicants are liable for ensuring that each required regulatory documents are disposable to assistance successful clearing goods, arsenic mandated by authorities agencies.

CBN asks banks to comply with caller order

Additionally, the CBN circular confirmed that authorised trader banks are present allowed to root FX for PAPSS settlements via the Nigerian Foreign Exchange Market (NFEM) to destruct the request to spell done the apex bank.

According to the circular, the measurement is expected to deepen liquidity successful the home marketplace and boost cross-border outgo settlements.

Per the document, export proceeds repatriated via PAPPS indispensable acquisition certification by the applicable processing banks.

CBN asked each authorised trader banks to follow PAPSS and statesman originating transactions nether the caller guidelines.

It besides appealed to exporters, importers and individuals progressive successful intra-African commercialized to go acquainted with the updated requirements and leverage the strategy for cross-border transactions.

Experts accidental naira volition benefit

Experts person said the determination volition boost transparency and assistance the naira to retrieve mislaid crushed against large currencies.

The improvement comes arsenic the Nigerian currency depreciated successful the Nigerian Foreign Exchange Market (NFEM) connected Monday, April 28, 2025.

Naira depreciates again

CBN data showed that the naira fell by N7 against the US dollar.

Currency dealers quoted the dollar astatine N1,596, little than the N1,589 it traded for the erstwhile day.

Also, the dollar traded astatine a precocious of N1,603.50 and a debased of N1,596 per dollar.

However, the existent FX complaint is an betterment comparative to anterior weeks erstwhile the naira traded supra N1,600 per dollar, hitting the lowest of N1,644 connected April 9, 2025.

The improvement sent panic into the FX markets, prompting the CBN to intervene connected respective occasions by selling forex to authorised dealers to forestall the naira’s full collapse.

Nigerians fearfulness full naira collapse

The naira, which had traded wrong the N1,500 ceiling, crossed the threshold, stoking fears of further devaluations by the Nigerian authorities pursuing the autumn successful crude lipid prices and the interaction of US tariffs.

“The CBN guidelines are timely and would prevention the section currency from full collapse,” Janet Ogochukwu, an economist and elder banker, told Legit.ng successful an exclusive chat.

She said the determination is different measurement by CBN to prevention the naira, which has experienced renewed volatility recently.

CBN issues caller directive for FX sourcing for PAPSS transactions. Credit: NurPhoto/Contributor
Source: Getty Images

“The naira is experiencing different circular of volatility, caused by President Donald Trump’s tariffs and falling crude lipid prices. The naira volition look further challenges arsenic OPEC plans to summation output, which mightiness pb to a further driblet successful crude lipid prices, impacting the naira negatively,” she said.

CBN releases caller speech complaint for the naira

Legit.ng earlier reported that the Nigerian currency depreciated successful the authoritative model connected Tuesday, April 22, 2025, contempt the dollar hitting a three-year low.

The Nigerian currency closed trading astatine N1,606 to a dollar from N1,600.50 it traded connected Thursday, April 18, 2025.

The depreciation comes amid the diminution successful Nigeria’s overseas speech reserves, which depreciated by $111.17 cardinal to $37 billion.

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Source: Legit.ng