Forex
CBN Directs International Money Transfer Operators to Commence Naira Remittance Pay-Outs
CBN’s move to introduce Naira remittance pay-outs alongside foreign exchange seeks to boost Nigeria’s economy
In a significant move to enhance the Nigerian economy, the Central Bank of Nigeria (CBN) has instructed International Money Transfer Operators (IMTOs) to initiate remittance pay-outs in Naira, in addition to foreign exchange.
This directive also includes the utilization of the Investors and Exporters’ Window foreign exchange rate for determining the conversion rate for the Naira pay-outs.
The CBN circular, dated July 10, 2023, comes as an extension of a previous circular issued on November 30, 2022, which provided guidelines on the payout policy of Diaspora remittances.
The previous circular introduced the payment of dollars to beneficiaries of diaspora remittances through IMTOs via their chosen banks, granting unrestricted access to their funds.
According to the newly issued circular, the Naira payment option is an additional choice alongside United States Dollars and E-Naira for receiving Diaspora remittances.
Recipients of Diaspora remittances through CBN-approved IMTOs listed in the circular will now have the option to receive their payments in Naira.
The circular specifies that IMTOs are obligated to pay out the proceeds using the Investors’ & Exporters’ window rate as the reference rate on the transaction date. This regulation takes immediate effect.
This recent development follows the CBN’s decision last month to unify all segments of the Nigerian forex market by consolidating all windows into the Investors & Exporters (I&E) window. This strategic move aimed to enhance liquidity, stability, and attract foreign investors to the Nigerian economy.
Similarly, the CBN terminated the RT200 program and the Naira4dollar remittance scheme. The Naira4Dollar scheme, introduced in 2021, incentivized remittances from Nigerians in the Diaspora by providing N5 for every USD1 remitted by the sender and collected by the designated beneficiary.
The scheme proved successful in encouraging more remittances and a consistent inflow of foreign exchange into the country.
The RT200 program, a comprehensive plan to increase non-oil export earnings and achieve $200 billion in foreign exchange repatriation within the next five years, has also been discontinued.
With these latest directives, the CBN aims to provide more flexibility and convenience for beneficiaries of Diaspora remittances, strengthening the nation’s economy and fostering financial stability.