The Central Bank of Nigeria (CBN) has announced that remittance inflows reached $553 million in July 2024, marking a significant 130 percent increase compared to the same period in 2023. The remarkable surge underscores the effectiveness of recent policy measures implemented by the CBN to enhance liquidity in Nigeria’s foreign exchange (FX) market.
In a statement released on Tuesday, signed by Hakama Sidi Ali, the acting director of corporate communications, the CBN highlighted that this influx is the highest monthly total on record. The increase comes shortly after the CBN granted eligible International Money Transfer Operators (IMTOs) access to trade on the official FX window, allowing them to access naira liquidity in the official market. This move follows the CBN’s decision on May 15 to grant approval in principle (AIP) to 14 new IMTOs, mandating them to make naira payments to recipients in Nigeria and removing the cap on the FX rate quoted for such transactions.
The CBN attributes the substantial growth in remittance receipts to these strategic policy adjustments, which are designed to enhance market liquidity and foster greater confidence in the FX market. The apex bank’s initiatives, including the licensing of new IMTOs, the implementation of a willing buyer-willing seller model, and the facilitation of timely naira liquidity access, have been instrumental in driving this growth.
Diaspora remittances play a crucial role in Nigeria’s economy, supplementing foreign direct investment and portfolio investments. The CBN’s efforts are in line with its broader goal of doubling formal remittance receipts within a year, thereby strengthening the country’s financial system and promoting price stability, which is essential for sustained economic growth.
Furthermore, the CBN noted that recent data from the National Bureau of Statistics (NBS) showed a slowdown in Nigeria’s year-on-year headline inflation rate in July 2024, the first decline in 19 months. This is seen as a clear indication that the CBN’s monetary policy tightening measures are beginning to yield positive results.
Looking ahead, the CBN stated that it will continue to monitor market conditions closely and adjust its policies as necessary to support further growth in remittance flows and maintain stability in the FX market.
