The Central Bank of Nigeria (CBN) has adjusted the landscape for international money transfer operators (IMTOs), limiting their operations to inbound transfers only and effectively halting outbound transactions. These changes, outlined in revised guidelines effective January 31, 2024, mark a significant departure from the 2014 rules that allowed IMTOs to engage in both inbound and outbound international money transfer transactions.
Under the newly- established guidelines, IMTOs are now constrained to accepting monies for transmission exclusively to individuals in Nigeria, along with providing cross-border personal money transfer services.
The CBN’s decision is positioned to manage foreign exchange reserves, stabilize the local currency, and potentially curb illicit financial flows. Additionally, IMTOs are barred from acquiring foreign exchange from the domestic market to fulfill their obligations.
In tandem with these restrictions, the CBN has introduced guidelines specifying that all inbound money transfers to Nigeria must be paid in Naira, either through a bank account or in cash. Transactions exceeding $200 must be processed through an account, with cash payments requiring acceptable means of identification.
This development follows the central bank’s earlier introduction of the Naira payout option for diaspora remittances, and the exchange rate for Naira payments will be based on prevailing rates in the Nigerian Foreign Exchange Market.
These measures come at a time when the Naira recently hit a record low of N1,482.57/$ due to increased demand on the official market, highlighting the central bank’s efforts to navigate foreign exchange dynamics and stabilize the local currency.
