International Money Transfer Operations With No Exchange Rate Cap
The Central Bank of Nigeria (CBN) has removed caps on naira payout rates for international money transfer operators (IMTOs) to further liberalize the foreign exchange market.
IMTOs can now offer naira payout rates based on the current exchange rate, overriding a CBN circular issued on September 13, 2023.
The move comes amid ongoing discussions about the naira’s stability and its value in the official foreign exchange market.
Some Nigerian commentators argue that implementing the upper and lower caps was a preemptive measure to mitigate the risk of rapid depreciation of the naira.
However, this restriction led to an inflow of more dollars onto the parallel market, affecting the naira’s value in the official foreign exchange market.
(With inputs from Shikha Singh)
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