…These measures are aimed at widening access to local currency liquidity for the timely settlement of Diaspora remittances
TUE JUNE 25 2024-theGBJournal| The Central Bank of Nigeria (CBN) has outlined new set of rules aimed at enhancing local currency liquidity for settlement of Diaspora remittances.
The new rule is part of the apex bank’s commitment to the smooth functioning of the foreign exchange markets and enabling greater remittance flows through formal channels.
The new rule enables eligible International Money Transfer Operators (IMTOs) access the local currency liquidity through the CBN.
”These measures are aimed at widening access to local currency liquidity for the timely settlement of Diaspora remittances,” the CBN said in their circular Monday.
Eligible IMTO operators, with the new rule, will be able to access the CBN window directly or through their authorized dealer banks (ADBs) to execute transactions for the sale of foreign exchange in the market.
To guide the process the CBN spelt out compliance measures that says;
1-The option of same day settlement will be available for transactions executed and confirmed before 12 noon on a trading date,
2-The pricing for transactions executed with the CBN will be based on prevailing NAFEM rates, as referenced by an observable and acceptable market benchmark,
3-The operation of this market segment follows the existing arrangement in place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions,
4-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,
5-All interested IMTOs are required to confirm their partner banls and advise standard settlement instructions to facilitate the smooth implementation of this initiative, and
6-Participants in this segment are the IMTOs, Authorized Dealer Banks and the CBN.
The CBN remined all licensed IMTOs that all Diaspora remittances are expected to terminate in Naira and match with the corresponding foreign currency inflows.
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