The Central Bank of Nigeria (CBN) has announced new measures to enhance local currency liquidity for the settlement of diaspora remittances.
The measures will allow eligible international money transfer operators (IMTOs) to access naira liquidity at the official window.
This move is part of the regulator’s commitment to the smooth functioning of the foreign exchange (FX) markets and enabling greater remittance flows through formal channels.
According to the CBN, the new measures will widen access to local currency liquidity for the settlement of diaspora remittances.
Eligible IMTO operators will be able to access the CBN window directly or through their Authorized Dealer Banks (ADBs) to execute transactions for the sale of foreign exchange in the market.
The IMTOs are companies that provide cross-border money transfer services, facilitating the transfer of funds from individuals or entities residing abroad to recipients in Nigeria.
The CBN has stipulated rules to guide the process and enable compliance, including same-day settlement for transactions executed before 12 noon on a trading date.
Pricing on the CBN portal will be reflective of NAFEX traded rates observable on an acceptable market benchmark.
The operation of this market segment will follow the existing arrangement in place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions.
Regulatory returns to be submitted to the CBN by all participants on a daily basis are mandatory and must contain all relevant information on the sources of funds.
The CBN’s move is expected to significantly improve the liquidity of local currency for diaspora remittances, enhancing the overall efficiency and reliability of the foreign exchange market in the country.
The bank has been collaborating with IMTOs to double remittance flows through formal channels into Nigeria, with the goal of increasing transparency and competitiveness in the FX market.
In May, the CBN granted approval in principle (AIP) to 14 new IMTOs, and the governor of the CBN, Olayemi Cardoso, has expressed confidence in the bank’s ability to double remittance flows into Nigeria within a year.