The Central Bank of Nigeria (CBN) has issued a warning to International Money Transfer Operators (IMTOs) regarding arbitrary rate quotes and other sharp practices. The CBN stated that IMTOs found in violation of regulations could face sanctions, including the compulsory sale of their proceeds to the central bank, suspension from operations, and loss of operating license. This action comes after the CBN observed breaches of guidelines by some IMTOs in the course of routine checks.
Key Points:
- The CBN has warned IMTOs against engaging in practices that violate regulations, emphasizing that they may face sanctions for such actions.
- The warning is in response to the observed breaches of guidelines by IMTOs, prompting the CBN’s intervention.
- IMTOs are required to quote rates within the allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate of the Nigerian Foreign Exchange Market for their transactions.
- The CBN’s intervention aims to ensure compliance with guidelines and maintain transparency in international money transfer services.
Analysis: The CBN’s warning to IMTOs reflects the central bank’s commitment to maintaining transparency and adherence to regulations in international money transfer services. By issuing this warning, the CBN aims to prevent practices that could disrupt the foreign exchange market and potentially harm the economy. The threat of sanctions serves as a deterrent for IMTOs to ensure compliance with the specified guidelines and rates. This move is aligned with the CBN’s broader efforts to regulate and stabilize the foreign exchange market in Nigeria.
