A policy shift designed to improve remittance inflow and foreign exchange (FX) liquidity within the official market was yesterday announced by the Central Bank of Nigeria (CBN).
The adjustment allows eligible International Money Transfer Operators (IMTOs) to sell foreign exchange directly on the Nigerian Autonomous Foreign Exchange Market (NAFEM).
The shift came amidst the CBN’s ongoing efforts to encourage the use of formal channels for diaspora remittances.
Hitherto, IMTOs were barred from accessing FX in the official market.
It also came on a day the CBN Governor, Dr. Olayemi Cardoso, declared an end to volatility in the forex exchange (FX) market.
“We do believe that we have more or less seen the worst in terms of volatility,” Cardoso said in a chat with Bloomberg TV.
The CBN announced the policy shift in a circular signed by its Acting Director, Trade and Exchange, Dr. W. J. Kanya.
It (policy) is expected to encourage IMTOs to route transactions through official channels, potentially leading to a substantial increase in recorded remittance inflows.
By allowing IMTOs to sell foreign exchange on the NAFEM Window, the CBN hopes to increase the overall FX supply in the official market.
