The Central Bank of Nigeria (CBN) has stopped international oil companies (IOCs) operating in Nigeria from immediately remitting 100% of their forex proceeds to their parent company abroad.
This was disclosed in a circular signed by the apex bank’s Director of Trade and Exchange, Hassan Mahmud where it stated that the practice known as “cash polling” has an impact on liquidity in the domestic forex market.
According to the new guidelines, IOCs will now be allowed to repatriate only 50% of their proceeds immediately while the other 50% will be repatriated 90 days from the day of inflow.
What the CBN is saying,
“The Central Bank has observed that proceeds of crude oil exports by International Oil Companies (IOCs) operating in Nigeria are transferred offshore to fund parent accounts of the IOCs (otherwise referred to as cash polling). This has an impact on liquidity in the domestic foreign exchange market”
“In line with the ongoing reforms in the foreign exchange market, it has become necessary to take measures to address this trend. Consequently, the CBN hereby directs as follows;
“Banks are allowed to pool cash on behalf of IOCS, subject to a maximum of 50% of the repatriated export proceeds in the first instance
The Balance 50% may be repatriated after 90 days from the date of inflow of export proceeds”
