The Central Bank of Nigeria (CBN) has issued a directive requiring International Money Transfer Operators (IMTOs) to pay out proceeds using the Investors and Exporters’ (I&E) window foreign exchange (FX) rate as the anchor rate on the transaction day. The directive aims to align remittance payouts with the prevailing market rates and enhance transparency in the foreign exchange system.
In addition to the directive, the CBN has approved the inclusion of five additional IMTOs to facilitate diaspora remittances. These IMTOs will join the existing list of CBN-approved operators, allowing recipients of remittances to have the option of receiving payments in Nigerian Naira, United States Dollars (USD), or eNaira.
The circular, addressed to Deposit Money Banks (DMBs), IMTOs, and the general public, emphasizes the immediate implementation of the new payout option and urges compliance. The CBN has also updated its list of registered IMTOs, expanding it from 62 operators in April 2021 to the current 67, with the inclusion of CSL Pay Limited, e-2-e Pay Limited, LeadRemit Limited, Lycamoney Financial Services Limited, and SimbaPay Limited.
Despite the efforts to unify Nigeria’s exchange rate, a disparity between the official and parallel market rates persists. As of the latest information, the Naira stood at N746/$1 at the I&E window, while it closed at N812/$1 on the parallel market. Market analysts predict that the Naira’s stability will depend on further clarity regarding the CBN’s monetary policy.
Opinion: The CBN’s directive to IMTOs to pay out using the I&E window rate demonstrates the central bank’s commitment to promoting transparency and aligning remittance transactions with market realities. By including additional IMTOs and offering Naira as a payout option, the CBN aims to enhance the flexibility and convenience of remittance services for recipients. However, the ongoing disparity between official and parallel market rates underscores the challenges faced in achieving a fully unified exchange rate. Clarity on the CBN’s monetary policy will play a crucial role in determining the future stability of the Naira.