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CBN removes exchange rate cap for International Money Transfer Operators


The Central Bank of Nigeria (CBN) has issued a new circular that removes the previous cap on exchange rates quoted by International Money Transfer Operators (IMTOs).

This follows a circular issued by the central bank addressing suspected cases of excessive foreign currency speculation and hoarding from Nigerian banks.

The circular titled Removal of Allowable Limit of Exchange Rate Quoted by the International Money Transfer Operators dated September 13, 2023, marks a shift towards a more liberalized foreign exchange regime in Nigeria.

These policies appear to be aimed at addressing Nigeria’s forex liquidity challenges and the resultant exchange rate depreciation which closed at N1,455/$1 on Wednesday, January 31, 2023. 

Why the change?

Previously, IMTOs were required to quote rates within a permissible range of -2.5% to +2.5% around the previous day’s closing rate of the Nigerian Foreign Exchange Market.

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What this means

The removal of the -2.5% to +2.5% cap represents a significant step by the CBN towards liberalizing the foreign exchange market in Nigeria.

This development is likely to have implications for the foreign exchange market in Nigeria, affecting both individuals and businesses engaged in international transactions.

The CBN’s decision reflects the CBN’s move towards a more flexible and market-oriented foreign exchange environment, which they believe could contribute to the overall health and efficiency of Nigeria’s financial sector.

Circular on allowable limit of exchange rate quote_240131_211923

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