Nigeria’s Central Bank Scraps Exchange Cap for International Money Transfer Operators   

The Central Bank of Nigeria eliminated the cap on exchange rates quoted by International Money Transfer Operators. CBN previously controlled the exchange rate at which International Money Transfer Operators like Western Union and MoneyGram could sell foreign currency to Nigerians. The CBN previously allowed the IMTOs to deviate from the official rate by a maximum of 2.5% (-2.5% to +2.5%). The new development is in response to the suspected hoarding of foreign currency by Nigerian commercial banks. The FG earlier gave a directive to commercial banks to release non-essential foreign currencies—currencies not needed for legitimate import payments, overseas travel allowances, or student tuition fees—to tame the naira’s depreciation against the dollar.