The Central Bank of Nigeria (CBN) has issued further clarifications on the utilization of foreign exchange proceeds by international oil companies (IOCs).
This update was announced in a circular signed by Dr. Hassan Mahmud, Director of the Trade & Exchange Department at the CBN, in response to queries from banks and other stakeholders.
The new circular stated that oil companies are allowed to immediately pool the initial 50% of their repatriated export proceeds as required.
Banks representing these companies can submit cash pooling requests ahead of the expected date of receipt, supported by the necessary documentation.
Additionally, the circular specified that the remaining 50% of the repatriated funds can be used by the oil companies to settle their financial obligations within Nigeria, as needed, during a prescribed 90-day period.
This policy by the CBN is part of ongoing efforts to regulate forex utilization while ensuring that the critical oil and gas sector operates efficiently within Nigeria’s financial regulations.
It reflects the central bank’s adaptive approach to managing the complex dynamics of foreign exchange amidst varied stakeholder interests in the nation’s pivotal oil and gas industry.
These clarifications are expected to help banks and oil companies better plan and manage their forex resources, thereby contributing to more robust financial compliance and operational efficiency within the sector.