The Central Bank of Nigeria (CBN) has disclosed that measures have been implemented to allow eligible International Money Transfer Operators (IMTOs) access naira liquidity through it or through their Authorised Dealer Banks (ADB).
The apex bank, which stated this in a circular posted on its website late on Monday, said the new measures are aimed at enhancing access to local currency liquidity for the settlement of diaspora remittances.
The circular also said that the measures are part of the CBN’s commitment to the “smooth functioning of the foreign exchange (FX) markets and enabling greater remittance flows through formal channels.”
It further stated that, from now on, eligible IMTO operators will be able to access the CBN window directly or through their ADBs to execute transactions for the sale of foreign exchange in the market.
According to the circular, compliance with the new measures requires that: “the option for same day settlement will be available for transactions executed and confirmed before 12 noon on a trading date (and that) the pricing for transactions executed with the CBN will be based on prevailing NAFEM rates, as referenced by an observable and acceptable market benchmark .”
It also stated that: “The operation of this market segment follows the existing arrangement in place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions.”
In addition, the circular said that as part of the new measures: “Regulatory returns to be submitted to the CBN by all participants on a daily basis are mandatory and this is expected to contain all the information on the sources of funds.”
It reminded IMTOs that, “all diaspora remittances are expected to terminate in naira and match with the corresponding foreign currency inflows.”
In February, the CBN had asked the IMTOs to only make naira payments to recipients in Nigeria, removing the allowable limit of the FX rate quoted for such transactions.
On April 20, CBN Governor, Olayemi Cardoso, said the apex bank has been collaborating with the IMTOs to collectively commit to doubling remittance flows through formal channels into Nigeria.
New Telegraph reports that the CBN granted Approval -In -Principle (AIP) to 14 new IMTOs on May 15.