IMTOs Gain Naira Access from CBN to Increase Remittances.
The Central Bank of Nigeria (CBN) announced new measures on Monday to enhance naira liquidity and increase diaspora remittances. In a recent circular, the CBN stated that eligible International Money Transfer Operators (IMTOs) will now have access to naira liquidity through the bank’s window, aimed at ensuring smoother settlement processes for remittances.
Under the new guidelines, IMTOs can directly access the CBN window or do so via their Authorized Dealer Banks (ADBs) for foreign exchange transactions. Transactions executed before noon will be settled on the same day, with pricing reflecting the NAFEX traded rates.
Participants, including IMTOs, authorized dealer banks, and the CBN, are required to submit daily regulatory returns. The initiative, effective immediately, aims to enhance the efficiency and reliability of the foreign exchange market in Nigeria.
In May 2024, the CBN granted 14 IMTOs an approval-in-principle to boost formal remittance channels, targeting an increase in foreign-currency remittance inflows. This move is part of a broader strategy to improve naira liquidity and stabilize the exchange rate by promoting competition and innovation among IMTOs.
CBN Governor Olayemi Cardoso emphasized the bank’s goal to double remittance flows into Nigeria within a year, focusing on removing bottlenecks in the remittance process. This initiative is expected to augment liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), aiding in market-driven price discovery for the naira.
