Naira gains across FX markets as remittance rule boosts liquidity

The naira on Thursday appreciated across foreign exchange (FX) market segments as liquidity improved following a new directive by the Central Bank of Nigeria (CBN) on remittance flows.

Data from the CBN showed the naira strengthened marginally by N2.82 to close at N1,383.88 per dollar on Thursday, representing a 0.2 percent gain compared with N1,386.70 quoted on Wednesday at the Nigerian Foreign Exchange Market (NFEM).

At the parallel market, also known as the black market, the local currency also firmed slightly, appreciating by N3 or 0.2 percent, to N1,412 per dollar on Thursday, compared with N1,415 per dollar recorded since Monday. The spread between the official and parallel market rates remained unchanged at N29.

Despite the currency’s gains, Nigeria’s external reserves continued their downward trend, declining for the eighth consecutive session. The reserves fell by 0.99 percent to $49.52 billion as of March 25, 2026, from a recent peak of $50.02 billion recorded on March 11, 2026, according to data from the CBN website.

The CBN on Tuesday moved to tighten oversight of diaspora inflows, directing all International Money Transfer Operators (IMTOs) to route transactions through designated naira settlement accounts in banks. The policy aims to improve transparency and deepen liquidity in the official FX market.

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The directive was contained in a circular titled “Measures to Further Enhance Compliance in the Remittance Space,” addressed to IMTOs, Authorised Dealer Banks (ADBs), and the general public, and signed by Musa Nakorji, director of the Trade and Exchange Department.

Analysts at Financial Markets Dealers Association (FMDA) described the move as a forward-looking structural reform designed to enhance transparency, efficiency, and coordination within Nigeria’s FX market.

IMTOs, including global operators such as Western Union and MoneyGram, play a critical role in facilitating diaspora remittances into Nigeria, serving as a key source of foreign exchange inflows that support households and broader economic activity.

Under the new framework, all IMTO inflows are now channelled through authorised dealer banks for conversion into naira. This strengthens the role of the formal banking system, improves traceability of FX transactions, and ensures that remittance flows are fully integrated into the official market architecture.

Previously, the conversion process operated across multiple channels, allowing IMTOs flexibility in sourcing naira for settlement. While this supported uninterrupted remittance flows, pricing and execution varied across different segments of the market.

The new directive introduces a more standardised and coordinated framework. All foreign currency inflows from IMTOs are now sold to authorised dealer banks, which in turn provide the naira required for settlement. While IMTOs retain the flexibility to choose their banking partners, the conversion process is now fully aligned with the formal banking system, improving market visibility and strengthening overall liquidity in the FX market.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.