Nigeria’s move to unify multiple foreign exchange (FX) rate windows has significantly boosted diaspora remittances, with inflows through International Money Transfer Operators (IMTOs) rising to $4.18 billion in the first three quarters of 2024—up from $2.33 billion in the same period of 2023.
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, made this disclosure at the Monetary Policy Stakeholders Forum in Abuja. He attributed the increase to recent monetary and foreign exchange policy reforms aimed at strengthening the financial system and ensuring macroeconomic stability.
Impact of FX Unification on Remittances
Speaking at the forum, Cardoso emphasized that the unification of multiple exchange rate windows was a key factor behind the surge in remittance inflows.
“This reform yielded tangible results, with remittances through International Money Transfer Operators rising by 79.4 percent in the first three quarters of 2024 to $4.18 billion, compared to $2.33 billion in the same period of 2023,” he said.
The CBN’s FX reforms aimed at improving market efficiency and transparency have restored investor confidence and encouraged higher remittance inflows, contributing to increased foreign exchange liquidity.
Strengthening Monetary Policy and Economic Stability
Cardoso described the Monetary Policy Stakeholders Forum as a crucial platform for evidence-based discussions on policy formulation, implementation, and outcomes.
“Unlike broader economic conferences, our discussions here are designed to address monetary policy challenges with precision, offering insights that enhance policy effectiveness,” he noted.
Beyond monetary policy adjustments, the CBN has undertaken various financial system reforms, including:
Enhancing FX Market Efficiency: The unification of exchange rate windows has streamlined the foreign exchange market, reducing arbitrage and ensuring a more predictable rate structure.
Strengthening Financial Stability: The CBN has implemented measures to boost confidence in the banking sector, ensuring banks meet new capital requirements to remain globally competitive.
Tackling Inflation: By adopting orthodox monetary policy approaches, the apex bank aims to stabilize prices and maintain macroeconomic stability.
Outlook for Remittances and Foreign Exchange
With global capital flows expected to improve as advanced economies adjust their monetary policies, Nigeria is positioning itself to attract more inflows by enhancing investor confidence through continued reforms.
The CBN remains committed to policies that will sustain foreign exchange stability, boost remittances, and drive economic growth. Stakeholders at the forum expressed optimism that these reforms would create a more stable and predictable economic environment for businesses and individuals alike.