In response to Nigeria’s foreign exchange crisis, the Central Bank of Nigeria (CBN) has released updated guidelines for International Money Transfer Operators (IMTOs). The CBN’s recent circular, titled ‘Reviewed Guidelines of International Money Transfers in Nigeria’, signed by Director of Trade and Exchange, Hassan Mahmud, outlines significant changes in the operation of IMTOs in the country.
According to the new guidelines, IMTOs are prohibited from engaging in outbound transactions and purchasing foreign exchange from the domestic foreign exchange market for settlement. Additionally, the minimum share capital for IMTOs has been set at $1 million for foreign companies and the equivalent amount for indigenous companies.
The circular also restricts banks and financial technology companies from directly providing international money transfer services, permitting them to only act as agents. International money transfer operations are now limited to inbound transactions, including cross-border personal money transfers for family maintenance, money transfers for foreigners visiting Nigeria, and other similar activities targeting individual customers, businesses, and foreign visitors. The circular emphasizes that these activities will be periodically reviewed by the CBN.
This move by the CBN aims to address the persistent fluctuations in Nigeria’s foreign exchange market. Notably, the CBN recently issued additional guidelines to combat foreign currency hoarding and speculation, leading to a positive impact on the Naira’s value against the US dollar.
The CBN’s proactive policy interventions underscore its commitment to stabilizing the country’s FX market and ensuring a more transparent and efficient system for international money transfers.
