IMTO exchange rate restrictions lifted by the central bank. Nigeria’s Central Bank removes exchange rate limitations for IMTOs in response to the FX crisis. On a willing seller, willing buyer basis, IMTOs are now permitted to quote exchange rates for naira payout to beneficiaries based on the current market rates at the Nigerian Foreign Exchange Market.
The Central Bank of Nigeria (CBN) removed limitations on exchange rates for International Money Transfer Operators (IMTOs) on Wednesday in an effort to further liberalize the Nigerian foreign exchange market.
The restriction was first disclosed in a circular dated September 13, 2023, under reference TED/FEM/PUB/FPC/001/009, which also marked a substantial change in the way IMTOs regulate exchange rates.
Related: Naira continues to decline in forex markets
Initially, the circular required IMTOs to quote rates between a maximum of -2.5 percent and +2.5 percent based on the Nigerian foreign currency market’s closing rate the day before.
The most recent circular, however, which was signed by Hassan Mahmud, the Director of Trade and Exchange at the CBN, states that IMTOs now have the freedom to quote exchange rates for beneficiaries’ naira payouts depending on the going market rates.
“In line with the CBN’s commitment to liberalize the Nigerian Foreign Exchange Market, IMTOs are hereby allowed to quote exchange rates for naira payout to beneficiaries based on the prevailing market rates at the Nigerian Foreign Exchange Market on a willing seller, willing buyer basis,” it said.
Related: Femi Otedola emerges chairman of FBN Holdings
The CBN also eliminated the cap on the permitted range of -2.5 to +2.5 percent around the Nigerian foreign currency market’s closing rate the day before.
The CBN reminded the public, international money transfer companies, and authorized dealers to abide by the new circular, which supersedes the prior order.
As part of the endeavors to stabilize the Nigerian local unit, this modification is anticipated to enhance the effectiveness and adaptability of foreign exchange operations.
