The Central Bank of Nigeria (CBN) has implemented a new policy prohibiting international oil companies (IOCs) operating in Nigeria from immediately remitting 100 per cent of their foreign exchange proceeds to their parent companies abroad.
This directive was outlined in a circular signed by the Director of Trade and Exchange at the CBN, Hassan Mahmud.
The circular highlighted that the practice, known as “cash pooling,” adversely affects liquidity in the domestic forex market.
Under the new guidelines, IOCs will only be permitted to repatriate 50 per cent of their proceeds immediately, with the remaining 50 per cent to be repatriated 90 days from the date of inflow.
Explaining the rationale behind the directive, the CBN emphasized the need to address the impact of cash pooling on the domestic forex market, aligning with ongoing reforms in the foreign exchange market.
