The Central Bank of Nigeria (CBN) has said that funds from the official foreign exchange market can now be used to negotiate unconfirmed letters of credit (L/Cs) for certain types of imports.

From April 2012, importers buying raw materials or plant and machinery will be able to use funds obtained via the official Wholesale Dutch Auction System.

Specific imports

A CBN circular explains that dealers must use funds only for specified imports.

Use of funds for other purposes will render dealers liable to sanctions, including suspension from the foreign exchange market.

Directive superseded

The latest CBN circular supersedes a directive issued by the central bank in November 2010.

It effectively barred dealers from using funds from the official foreign exchange market to negotiate unconfirmed L/Cs for any imports.

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