The Central Bank of Nigeria (CBN) has issued a directive to Deposit Money Banks (DMBs) and International Money Transfer Operators (IMTOs) mandating the payment of all diaspora remittances in Naira, alongside corresponding foreign currency inflows. This move, effective immediately as per a circular dated June 24, 2024, aims to enhance the functioning of the foreign exchange market and facilitate increased remittance flows through formal channels.
CBN Governor Mr. Olayemi Cardoso reaffirmed the commitment of the Monetary Policy Committee (MPC) to combat inflation through conventional methods amidst recent economic challenges. The directive includes provisions for eligible IMTOs to access Naira liquidity directly from the CBN, streamlining transaction processes for foreign exchange sales in the market.
Furthermore, the circular outlines a compliance framework, emphasizing same-day settlement options for transactions processed before noon on trading dates. Pricing for CBN-executed transactions will be based on prevailing rates in the Nigerian Autonomous Foreign Exchange Market (NAFEM), leveraging established market benchmarks.
The CBN’s efforts align with ongoing initiatives aimed at boosting capital inflows via diaspora channels, including the introduction of the eNaira digital currency for remittance payments. Governor Cardoso highlighted recent improvements in market liquidity and stability, attributing these advancements to unified exchange rate systems and enhanced market confidence.
Despite challenges such as a significant rise in annual inflation rates, reaching a 28-year high of 33.95% in May 2024, recent data indicates a slowdown in month-on-month inflation rates, reflecting the impact of tightened monetary policies. The MPC remains vigilant in monitoring inflation trends and is set to reconvene next month to review policy options and economic strategies.
In an interview with Bloomberg, Governor Cardoso underscored the importance of coordinated monetary and fiscal policies for achieving economic stability, stressing the need for continuous observation and management of macroeconomic fundamentals. He expressed confidence in current market dynamics and reiterated the CBN’s commitment to ensuring equitable market participation and stability for all stakeholders.