CBN Releases New Measures to Ease Liquidity for Diaspora Remittances

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has launched new measures to enhance local currency quick and easy liquidity for the settlement of diaspora remittances at its window.

In a circular signed by Mr W. J. Kanya, the Acting Director of the CBN’s Trade and Exchange Department, released on Tuesday to all Deposit Money Banks (DMBs) and International Money Transfer Operators (IMTOs), the apex bank said the measures will help the smooth functioning of the Foreign Exchange Markets and enable greater remittance flows through formal channels.

According to the new CBN measures which start with immediate effect, there will now be a same-day settlement for transactions executed before noon on a trading date.

It also said the pricing on the CBN portal would be reflective of the Nigerian Autonomous Foreign Exchange (NAFEX) traded rates observable on an acceptable market benchmark.

This follows the existing arrangement place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions.

For transparency, the lender said regulatory returns must be submitted to the CBN by all participants daily. This is mandatory and is expected to contain all the relevant information on the sources of funds.

It clarified that the participants in the segment are the IMTOs, Authorised Dealer Banks (ADBs) and the CBN, itself.

“These measures are aimed at widening access to local currency liquidity for the smooth functioning of the Foreign Exchange Markets and enabling greater remittance flows through formal channels, the Bank has implemented measures that will enable International Money Transfer Operators (IMTOs) access NGN liquidity at the CBN window. These measures are aimed at widening access to local currency liquidity for the settlement of diaspora remittances.

“Therefore, eligible IMTO operators will be able to access the CBN window directly or through their Authorised Dealer (ADB) to execute transactions for the sale of foreign exchange in the market,” the circular stated.