Nigeria: Forex Inflow via IMTOs Hits $1.07bn in Q1 2024 – CBN

Foreign exchange inflows from International Money Transfer Operators (IMTOs) surged by 38.86 percent to $1.07 billion in the first quarter of 2024, up from $770.23 million in the same period the previous year. This data was disclosed in the Central Bank of Nigeria’s (CBN) quarterly statistical bulletin for Q1 2024, recently published on its website.

The breakdown of the inflows shows that in January, IMTOs recorded $383.04 million, followed by a dip to $322.83 million in February, and a rebound to $363.70 million in March. Compared to the last quarter of 2023, inflows grew by 10.74 percent.

The CBN recently announced approvals-in-principle for 14 new IMTOs to enhance the sustained supply of foreign exchange in the official market. CBN Governor, Dr. Olayemi Cardoso, noted that these approvals are expected to increase competition and lower transaction costs, thereby attracting more remittances through formal channels.

“Over the years, reports from the World Bank have highlighted Nigeria’s significant remittances from the diaspora, which are estimated to represent about six percent of our GDP. Recognizing this, the Central Bank has developed a strategy to engage the IMTO sector, which plays a critical role in these inflows,” Dr. Cardoso stated during the Monetary Policy Committee meeting in May.

Furthermore, the CBN has announced that eligible IMTOs 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 CBN stated that this measure, effective immediately, will enable IMTOs to access naira liquidity at the official window, facilitating the timely settlement of diaspora remittances.

“The bank has implemented measures to allow eligible IMTOs to access NGN liquidity at the CBN window. These steps are designed to widen access to local currency liquidity for the settlement of diaspora remittances,” the CBN noted. “Eligible IMTO operators will be able to access the CBN window directly or through their authorized dealer banks to execute transactions for the sale of foreign exchange in the market.”

This strategic move by the CBN underscores its commitment to enhancing the flow of foreign exchange into the country, thereby stabilizing the naira and supporting economic growth.