In a significant development, the Central Bank of Nigeria (CBN) has opted to remove the allowable limit on exchange rates quoted by International Money Transfer Operators (IMTOs). This decision, communicated by Dr. Hassan Mahmud, the CBN’ s Director of Trade and Exchange, through a circular addressed to IMTOs and the general public on Thursday, aligns with the central bank’ s commitment to liberalize the Nigerian foreign exchange market.
The apex bank had previously instructed Deposit Money Banks (DMBs) to divest themselves of excess dollar stocks to stabilize the exchange rate and cautioned against hoarding forex currencies for profit. Mahmud’ s directive now permits IMTOs to quote exchange rates for Naira payouts to beneficiaries based on prevailing market rates, emphasizing a willing seller, willing buyer basis.
Crucially, the circular removes the cap on the allowable limit of- 2. 5 percent to +2. 5 percent around the previous day’ s closing rate of the Nigerian Foreign Exchange Market. This move signals a deliberate effort to introduce more flexibility into the exchange rate mechanism
Mahmud emphasized, ” Authorised dealers, IMTOs, and the general public are hereby informed to note and comply accordingly. ” This deregulation seeks to foster a more dynamic and market- driven approach to foreign exchange transactions, reflecting the CBN’ s commitment to a liberalized and transparent forex market.
