What you should know
In January 2024, the CBN issued a circular that removed the previous cap on exchange rates quoted by International Money Transfer Operators (IMTOs).
Before the circular, IMTOs were required to quote rates within a permissible range of -2.5% to +2.5% around the previous day’s closing rate of the Nigerian Foreign Exchange Market.
By the end of January, the apex bank further released revised guidelines for the operations of IMTOs. The apex bank increased the application fee for an IMTO licence from N500,000 in 2014 to N10 million in the revised guidelines. This is an increase of about 1,900% in about 10 years.
The CBN also established a minimum operating capital requirement for International Money Transfer Operators (IMTOs) at $1 million for foreign entities and an equivalent amount for local IMTOs.
Also, IMTOs were barred from purchasing foreign exchange from the domestic market to fulfil their obligations.
However, with a recent circular, it appears that this ban has been lifted, and IMTOs can now trade on the official market.
The apex bank earlier reached an agreement with International Money Transfer Operators (IMTOs)to set up a Collaborative Task Force to double remittance inflows into the country. The task force formed to double remittance inflows into Nigeria reports directly to Yemi Cardoso, the Governor of the CBN.
Also, the CBN recently granted 14 new Approval-in-Principle (AIP) to IMTOs, according to the Bank’s Acting Director of Corporate Communications, Hakama Sidi Ali.
The Central Bank’s reforms have included streamlining processes, onboarding more IMTOs, and enhancing measures to ensure an increase in the supply of foreign currencies.
These measures have evidently paid off, as evidenced by the increase in remittance inflows.
