NIGERIA: CBN grants IMTOs naira access to improve remittances

The latest circular from the CBN, issued on Monday, introduces several initiatives designed to provide eligible International Money Transfer Operators (IMTOs) with direct access to naira liquidity through the bank’s window.

This initiative, the CBN states, aims to broaden access to local currency liquidity, ensuring smoother and more efficient settlement processes for remittances. Under the new guidelines, IMTO operators can access the CBN window directly or through their Authorised Dealer Banks (ADBs) to execute foreign exchange transactions in the market. The circular details specific compliance measures to ensure the initiative's effective operation.

The circular, signed by W. J. Kanya, acting director of the trade and exchange department at the CBN, specifies that transactions completed before noon on a trading date will be settled the same day. Additionally, the CBN portal will now mirror NAFEX traded rates, based on an acceptable market benchmark.

The new segment operation will follow existing arrangements for authorized dealers involved in foreign portfolio investment in primary market securities auctions. Participants in this segment, including IMTOs, authorized dealer banks, and the CBN, are required to submit daily regulatory returns detailing the sources of funds.

Emphasizing the immediate effect of these measures, the circular highlights the CBN’s commitment to maintaining the smooth functioning of the foreign exchange market and improving formal remittance channels.

This move is part of the CBN's ongoing efforts to stabilize the naira and encourage the inflow of foreign currency through formal channels, thus supporting the broader economy.