IMTOs to sell FX on CBN window

The Central Bank of Nigeria has announced that eligible International Money Transfer Operators will now have access to the official window to sell foreign exchange.

In a circular signed by the acting Director of the Trade and Exchange Department, Dr W.J Kanya, the apex bank said that the measure which was effective immediately, would enable IMTOs to access naira liquidity at the official window, thus, enabling timely settlement of diaspora remittances.

The apex noted, “The bank has implemented measures that will enable eligible International Money Transfer Operators to access NGN liquidity at the CBN window. These measures are aimed at widening access to local currency liquidity for the settlement of diaspora remittances.

“Therefore, eligible IMTO operators will be able to access the CBN window directly or through their authorised dealer banks to execute transactions for the sale of foreign exchange in the market.”

It added that the option of same-day settlement would be available for transactions executed and confirmed before noon on a trading date.

“The pricing for transactions with the CBN will be based on prevailing NAFEM rates as referenced by an observable and acceptable market benchmark.

“The operation of this market segment follows the existing arrangement in place for authorised dealers with Foreign Portfolio Investment participating in the primary market securities auctions. Regulatory returns to be submitted to the CBN by all participants on a daily basis, are mandatory and this is expected to contain all the relevant information on the sources of funds and participants in this segment are the IMTOS, authorised dealer banks and CBN,” it further stated.

Before now, the key participants in the Nigerian FX market include the CBN, authorised dealers (financial institutions licensed by the CBN to trade FX) and clients (retail or corporate financial market participants who buy or sell FX to meet their day-to-day personal or business needs).

Meanwhile, the CBN Governor, Olayemi Cardoso, in an interview with Bloomberg TV on Tuesday, said that the worst of naira volatility was over.

He said, “I do believe that we have more or less seen the worst in terms of volatility. We are also very alive to observe the way and manner in which that market operates and ensuring that it gives the best value that can be accomplished using certain tools.”

“We are relatively pleased with where we are,” Cardoso said.

He noted the central bank needed to do more, adding, “It is continuous work in progress. And we will do everything possible to ensure that we continue to manage the macroeconomic fundamentals that affect that.”