Diaspora remittances can now be received in naira — CBN

The Central Bank of Nigeria (CBN) announced on Monday, July 10 that diaspora remittances into Nigeria can now be paid out to recipients in naira. 

The details 

• The CBN’s director of trade and exchange, Dr Ozoemena Nnaji made this known in a circular addressed to all banks, international money transfer operators (IMTOs) and the public. 
• The circular is an update to a November 30, 2020 directive by the CBN banning IMTOs from paying recipients in Naira. According to the CBN, the ban was a means to rein in more foreign currency inflows and deepen the foreign exchange market. 
• In the new development, the foreign currency to naira conversion and payments of proceeds to beneficiaries will be done at the unified Importers and Exporters Window rate. 

Key quote 

• The circular read: 

“Accordingly, all recipients of diaspora remittances through the CBN-approved IMTOs on the attached list shall henceforth have the option of receiving Naira payments in addition to USD and eNaira as payout options.” 

Catch up 

• The CBN has been actively overhauling its monetary policy since the Bola Tinubu-led administration resumed office on May 29.
• The bank declared the unification of foreign exchange rates by implementing a single exchange rate system through the bank's Importer and Exporter (I&E) window. As a result, the Naira was devalued by over one third. 
• In a more recent move, beneficiaries of diaspora remittances can now choose to be paid in Nigeria's digital currency, the eNaira.
• Mariblock reported that the apex bank said the move was aimed at driving adoption for the eNaira and providing an alternative for receiving foreign currency. 
• These measures have done little to alleviate Nigeria’s foreign exchange woes. Today, the naira trades at 799.38 naira to the dollar.
• In contrast, on May 28, a day before the new administration’s inauguration, the naira traded at 770 naira to the dollar on the black market and 461.5 naira at CBN’s official rate.