Diaspora remittances can now be received in naira — CBN

The move is the latest in a series of policies implemented by Nigeria’s new administration.

Diaspora remittances can now be received in naira — CBN
Mariblock/Clinton Mbataku
ℹ️

Editor’s note: This story is part of Mariblock’s “State of Fiat” coverage. Digital assets such as bitcoin are seen as competitors to central bank money. Therefore, we consider informing our audience of the state of their local currencies worthwhile.

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