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BANKING & FINANCENEWSNEWSLETTER

Deposit Money Banks To Remit International Transfers In Foreign Currencies

CBN Warns IMTOs To Pay Remittances In Forex

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, says Deposit Money Banks (DMB) will begin on Friday, December 4 to remit International Money Transfer Operators (IMTOs).

A statement released by the apex bank on Thursday quoted Emefiele as saying the bank has engaged banks and IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the foreign currency of their choice.

The CBN governor explained that the bank had earlier sought ways to support improved remittance inflows through official channels given the potential diaspora remittances had to help in improving the balance of payment position, reduce dependence on external borrowing and mitigate the impact of COVID-19 on foreign exchange inflows.

However, he said the bank CBN observed some pushback by some of the IMTOs who were bent on undermining the new policies.

“This was the reason the CBN had to insist on Wednesday, December 2, 2020, that all DMBs MUST close all Naira General Ledgers through which the Naira remittances were hitherto being carried out.

“We analyzed data on IMTO inflows into the country over the past year, and through our investigations discovered that some IMTOs, rather than compete on improving transaction volumes and create more efficient ways for Nigerians in the diaspora to remit funds, resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, which to a large extent resulted in a significant drop in inflows into the country.

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“It also encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining our foreign exchange management framework.”

The CBN policy helped the naira regain strength at the parallel market. At the close of trading on Thursday, the naira exchanged at ₦470 to the dollar.

About Author

Aina Adepeju is a Mass Communication graduate. She loves photography, she is a Member of the Nigerian Institute of Public Relations (NIPR) and Advertising Practitioners Council of Nigeria (APCON). Adepeju can be reached via [email protected]

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