February 26, 2024
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Central Bank of Nigeria Mandates IMTOs to Pay Recipients in Naira, Not Dollars

February 9, 2024

 

 

 

 

 

 

In a significant move aimed at regulating international money transfers, the Central Bank of Nigeria (CBN) has issued new directives to International Money Transfer Operators (IMTOs). Effective immediately, all Nigerian recipients of foreign currencies, particularly the United States Dollar (USD), will be paid in Naira.

The revised guidelines, unveiled by the CBN on January 31 and endorsed by Hassan Mahmud, the director of the apex bank’s trade and exchange department, underscore a pivotal shift in currency transactions. According to the directives, IMTOs are obligated to disburse payments to recipients of inbound transactions exclusively in Naira.

Moreover, the guidelines delineate that the exchange rate for these transactions will be pegged to the prevailing market rate. This adjustment aligns with the CBN’s ongoing efforts to streamline currency operations and ensure compliance within the financial ecosystem.

The decision to mandate Naira payouts for international remittances signifies a strategic initiative by the CBN to bolster the domestic currency and foster stability within the Nigerian financial landscape. As stakeholders adapt to these regulatory changes, the implications on cross-border transactions and economic dynamics are poised to reverberate across the region.

“All in-bound money transfers to Nigeria shall be paid to beneficiaries in Naira through a bank account or cash,” said CBN.

“The exchange rate shall be at the prevailing rate in the Nigerian Foreign Exchange Market.”

The apex bank, however, mandated IMTOs to disclose all charges and exchange rates to be used for converting payment transactions.

A post shared by General Oluchi, an X user, that Nigerian fintechs are starting to implement the policy. Oluchi had shared WorldRemit, a payment platform’s statement that USD could no longer be paid out in Nigeria.

Another X user also confirmed the policy, stating that she could no longer make transfers in USD to Nigeria.

The recent directive from the Central Bank of Nigeria (CBN) mandating International Money Transfer Operators (IMTOs) to pay Nigerian recipients in Naira rather than foreign currencies, notably the United States Dollar (USD), arrives amidst mounting concerns over the devaluation of the Naira and the imperative to address accumulated forex backlogs.

 

Credit: Fij.ng

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