Nigeria’s Central Bank 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 in a bid to improve transparency and deepen liquidity in the official foreign exchange market.

Customers are expected to see limited immediate change with this new move.

The Central Bank of Nigeria’s directive requiring IMTOs to route remittances through naira accounts in the banking system represents more of a structural adjustment than a radical shift for many recipients.

Analysts at FMDA describe the policy as “primarily a structural adjustment aimed at improving transparency and routing diaspora inflows through the formal banking system.” For most FX recipients, the experience remains largely unchanged, as “most beneficiaries were already receiving naira rather than dollars.”

Read also: Naira posts marginal loss after CBN tightens remittance rules

The key difference now is that the conversion process is standardised and fully aligned with official market channels. While this reduces flexibility, it also improves clarity and consistency in how remittances are priced and delivered.

IMTOs become more tightly regulated conduits

For IMTOs, the directive formalises their role within Nigeria’s FX framework. They are now required to operate strictly through the banking system, reinforcing oversight and reducing any scope for off-system transactions.

Although the analysts do not explicitly frame IMTOs as losers, the shift limits their operational flexibility and positions them more clearly as intermediaries within a regulated structure. The broader implication is a more transparent but tightly controlled remittance ecosystem.

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Banks gain stronger footing in FX market

Banks emerge as clear beneficiaries of the policy. By channelling a larger share of remittance inflows through the formal system, the directive enhances their role in FX intermediation.

FMDA analysts note that this “strengthens their role in the FX value chain, as they now intermediate a larger share of remittance-related flows.” This could support better price discovery and deepen activity in the official market over time, while also improving liquidity within the banking system.

Parallel market impact likely modest

While the policy is partly aimed at reducing pressure on the parallel market, its actual impact may be less dramatic than expected.

FMDA analysts say the effect is “likely to be moderate,” noting that IMTO inflows account for “roughly 4 to 10 per cent of total FX flows in the economy.” Historical data also shows that these inflows contributed “about 2 to 5 per cent of total flows between 2019 and 2021,” rising to “about 8 to 12 per cent between 2022 and 2024,” before easing to “around 6.7 per cent in 2025 so far.”

This suggests that while the policy may reduce some leakages into the informal market at the margin, it is unlikely to significantly constrain overall dollar supply in the parallel market on its own.

Read also:CBN mandates IMTOs to use naira settlement accounts for diaspora inflows

A gradual shift toward a more structured FX system

Overall, FMDA analysts see the directive as part of a broader effort to improve how foreign exchange flows are managed in Nigeria. The policy “represents a step towards strengthening transparency and improving the efficiency of FX flow management within the formal market.”

Although its immediate impact on liquidity may be modest, it reinforces the role of banks and supports a more coordinated and structured FX framework. In that sense, the biggest “winner” is the formal financial system itself, even if the short-term effects across customers, IMTOs, and the parallel market remain relatively contained.

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.

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