CBN Issues New Order to Access, Zenith, UBA, Other Banks on FX Sourcing for Exporters
- The Central Bank of Nigeria (CBN) has asked dealer banks to go through the Pan African Payment System (PAPSS) for FX sourcing
- The bank said the move was designed to promote a hassle-free intra-African trade, boost liquidity and financial inclusion
- Experts have said the development will also benefit the naira, which has faced renewed volatility recently
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Central Bank of Nigeria has said that authorised dealer banks can now source forex independently for the Pan-African Payment and Settlement System (PAPSS) via the Nigerian Foreign Exchange Market (NAFEM), without going through it.
CBN disclosed this in a statement signed by Hakama Sidi Ali, its Acting Director of Corporate Communications, on Monday, April 28, 2025, after unveiling the revised documentation requirements for PAPSS transactions in the country.
Source: Twitter
CBN gives reasons for new directive
The bank said the move is part of its ongoing efforts to promote a hassle-free intra-African trade, boost financial inclusion, and improve operational efficiency for Nigerians operating cross-border payments in Africa.
Under the new rule, customers operating low-value transactions can now use basic Know Your Customer (KYC) and Anti-Money Laundering documents already provided to their dealer banks.
Individuals transacting up to $2,000 in naira equivalent and corporate bodies up to $5,000 equivalent are eligible for the document regime.
The full suite of documentation is stipulated in the apex bank’s Foreign Exchange Manual, and associated circulars remain mandatory for transactions exceeding the thresholds.
The financial sector regulator further clarified that applicants are responsible for ensuring that all required regulatory documents are available to help in clearing goods, as mandated by government agencies.
CBN asks banks to comply with new order
Additionally, the CBN circular confirmed that authorised dealer banks are now allowed to source FX for PAPSS settlements via the Nigerian Foreign Exchange Market (NFEM) to eliminate the need to go through the apex bank.
According to the circular, the measure is expected to deepen liquidity in the domestic market and boost cross-border payment settlements.
Per the document, export proceeds repatriated via PAPPS must undergo certification by the relevant processing banks.
CBN asked all authorised dealer banks to adopt PAPSS and begin originating transactions under the new guidelines.
It also appealed to exporters, importers and individuals involved in intra-African trade to become acquainted with the updated requirements and leverage the system for cross-border transactions.
Experts say naira will benefit
Experts have said the move will boost transparency and help the naira to recover lost ground against major currencies.
The development comes as the Nigerian currency depreciated in the Nigerian Foreign Exchange Market (NFEM) on Monday, April 28, 2025.
Naira depreciates again
CBN data showed that the naira fell by N7 against the US dollar.
Currency dealers quoted the dollar at N1,596, lower than the N1,589 it traded for the previous day.
Also, the dollar traded at a high of N1,603.50 and a low of N1,596 per dollar.
However, the current FX rate is an improvement relative to prior weeks when the naira traded above N1,600 per dollar, hitting the lowest of N1,644 on April 9, 2025.
The development sent panic into the FX markets, prompting the CBN to intervene on several occasions by selling forex to authorised dealers to prevent the naira’s total collapse.
Nigerians fear total naira collapse
The naira, which had traded within the N1,500 ceiling, crossed the threshold, stoking fears of further devaluations by the Nigerian government following the fall in crude oil prices and the impact of US tariffs.
“The CBN guidelines are timely and would save the local currency from total collapse,” Janet Ogochukwu, an economist and senior banker, told Legit.ng in an exclusive chat.
She said the move is another step by CBN to save the naira, which has experienced renewed volatility recently.
Source: Getty Images
“The naira is experiencing another round of volatility, caused by President Donald Trump’s tariffs and falling crude oil prices. The naira will face further challenges as OPEC plans to increase output, which might lead to a further drop in crude oil prices, impacting the naira negatively,” she said.
CBN releases new exchange rate for the naira
Legit.ng earlier reported that the Nigerian currency depreciated in the official window on Tuesday, April 22, 2025, despite the dollar hitting a three-year low.
The Nigerian currency closed trading at N1,606 to a dollar from N1,600.50 it traded on Thursday, April 18, 2025.
The depreciation comes amid the decline in Nigeria’s foreign exchange reserves, which depreciated by $111.17 million to $37 billion.
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Source: Legit.ng
