The Central Bank of Nigeria (CBN) has asked authorised banks and International Money Transfer Operators (IMTOs) to pay all diaspora remittances in naira.
In a circular, W. J. Kanya, CBN’s acting director, noted that the instruction is part of its efforts to enhance the foreign exchange market’s efficiency and boost remittance flows through formal channels.
CBN also noted that these measures will access local currency liquidity to settle diaspora remittances promptly.
When paying the CBN expects banks and IMTOs to use the prevailing exchange rate.
The apex bank also stated that eligible IMTO operators can now conduct foreign exchange transactions in the official window, also known as The Nigerian Autonomous Foreign Exchange Market (NAFEM).
The IMTOs can participate in the window directly or through their authorised Dealer Banks (ADBs).
Here is a breakdown of CBN’s instructions Banks and IMTOs must comply with.
The CBN said that transactions executed and confirmed before 12 noon on a trading date will have the option for same-day settlement.
The pricing for transactions executed with the CBN will be based on prevailing NAFEX rates, referenced by an observable and acceptable market benchmark
This market segment will operate under the existing arrangement of authorised dealers with Foreign authorised investments participating in primary market securities auctions.
All participants must submit daily regulatory returns to the CBN containing relevant information on the sources of funds.
IMTOs must confirm their partner banks and provide standard settlement instructions to ensure the smooth implementation of this initiative.
Earlier, TimesNow.com.ng reported that the CBN reportedly stopped funding for Bureau de Change Operators.
The move aims to test the CBN’s reform template to minimise quick fixes in the FX market.
The CBN is also reportedly reviewing significant policies to strengthen the implementation or tweak its reforms.
Proofreading by James Ojo Adakole, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
