The Central Bank of Nigeria has prohibited International Oil businesses (IOCs) from repatriating all foreign exchange gains to their parent businesses overseas.
Beginning immediately, the regulation prohibits international oil companies from repatriating 50% of their revenues in the first instance and the other half after 90 days.
According to a circular issued by Hassan Mahmud, Director of Trade and Exchange at the CBN, IOCs must have ready access to their export profits in order to meet their offshore commitments.
The apex further stated that it will maintain the policy as long as it had the least negative impact on the liquidity of the Nigerian foreign currency market.
The circular reads;
“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.
“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.”
