International Oil Companies (IOCs) have been barred by the Central Bank of Nigeria from repatriating all their foreign exchange earnings to their parent companies abroad.
Commencing immediately, the policy restricts foreign oil firms from repatriating 50 percent of their proceeds in the first instance and the other half after 90 days.
In a circular signed by CBN’s Director of Trade and Exchange, Hassan Mahmud, it was stated that IOCs must have easy access to their export proceeds to fulfill their offshore obligations.
The apex also noted that it would hold on to the policy as long as it has the least possible detrimental effect on the liquidity of the Nigerian foreign exchange 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.”
