UPDATED: CBN reports all-time high remittance in July

The Central Bank of Nigeria (CBN) on Tuesday announced that it recorded all-time high remittances in July.

The bank said remittance inflow hit $553 million in July, representing 130 percent increase from the corresponding year.

According to a statement by the Acting Director, Corporate Communications, Hakama Ali, the figure represents the highest monthly inflow on records and reflects the CBN efforts to improve liquidity in the market.

It attributed the substantial growth in remittance receipts to a series of policy reforms implemented by the CBN to enhance liquidity in Nigeria’s foreign exchange market.

Key measures include the granting of licences to new International Money Transfer Operators (IMTOs), the introduction of a willing buyer-willing seller model, and improved access to naira liquidity for IMTOs.

The CBN said the initiatives are vital, as diaspora remittances serve as a crucial source of foreign exchange for Nigeria, supplementing both foreign direct investment and portfolio investments.

According to the statement, CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.

It said the measures have contributed to bolstering public confidence in the foreign exchange market and strengthening an inclusive banking system, which is essential for promoting price stability and sustained economic growth.

It cited the recent data from the National Bureau of Statistics (NBS) which indicates that Nigeria’s year-on-year headline inflation rate slowed in July 2024 for the first time in 19 months, saying the slowdown further reflects the effectiveness of the CBN’s monetary policy tightening measures.

The CBN said it remains committed to monitoring market conditions and adjusting policies as necessary to facilitate greater remittance flows into Nigeria.

Policy reforms

In January 2024, the CBN lifted the previous cap on exchange rates set by International Money Transfer Operators (IMTOs), which had restricted them to a margin of -2.5 per cent to +2.5 per cent around the previous day’s closing rate.

By the end of the same month, the CBN released updated guidelines for IMTOs, significantly raising the application fee for an IMTO licence from N500 thousand in 2014 to N10 million, marking an increase of approximately 1,900 per cent.

Additionally, a minimum operating capital requirement of $1 million was established for both foreign and local IMTOs. The initial prohibition on IMTOs purchasing foreign exchange from the domestic market was also lifted, allowing them to trade in the official market.

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The CBN has been proactive in collaborating with IMTOs to form a Collaborative Task Force aimed at doubling remittance inflows into Nigeria, which reports directly to Governor Yemi Cardoso.

Recently, the Bank also granted Approval-in-Principle (AIP) to 14 new IMTOs all to enhance remittances.