We’re back to the old: “The Central Bank of Nigeria (CBN) has rolled out new guidelines mandating that transfers made through international money transfer operators (IMTOs) will now be paid out exclusively in naira, a move believed to be geared toward mopping up dollars to increase FX liquidity.
“This directive, which is in line with regulations outlined in a circular dated January 31, 2024, affects major IMTOs such as Western Union, MoneyGram, Rapidtransfer, Ria, and other CBN-approved entities.”
Yet, CBN has offered something since the IMTOs now have the rights to set their own exchange rates, offering flexibility in the ecosystem.
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We’re back to the old: “The Central Bank of Nigeria (CBN) has rolled out new guidelines mandating that transfers made through international money transfer operators (IMTOs) will now be paid out exclusively in naira, a move believed to be geared toward mopping up dollars to… pic.twitter.com/30Gwx019uT
— Ndubuisi Ekekwe (@ndekekwe) February 9, 2024
This new playbook will ensure Nigeria does not need to spend the USD it has (reduced USD Demand in Nigeria), even as it hopes to get more Supply of dollars internationally. This is Economics 101: you can improve price positioning by reducing Demand, even as you improve Supply. The challenge now is to convince the diasporas to send those dollars, euros and pounds for Naira in Nigeria. Good luck Nigeria as we continue the experimentation.
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