CBN licenses 47 money transfer operators, retains interest rate at 11.5%

THE Central Bank of Nigeria (CBN) has licensed 47 international money transfer operators (IMTOs) in the country, with Flutterwave, NIPOST, Paypal and Western Union making the list. 

The apex bank listed names of the 47 IMTOs on its website on Monday in a bid to ward off unapproved or unauthorised IMTOs from playing in the space.

The list  shows that 17 of the IMTOs are based in the United Kingdom; 14 in Lagos; eight in the United States of America; three in Abuja; two in Senegal and  each in Ibadan, Morocco and Belgium.

IMTO list

Apart from Flutterwave, NIPOST, Paypal and Western Union, others that were licensed included UK-based Aftab Currency Exchange Limited; Lagos-based Colony Capital; Lagos-based Interswitch and Pagatech; Ibadan-based VTNetwork Limited; Abuja-based Simplify International Synergy, among others.

The apex bank recently warned Nigerians (home and abroad) over the activities of unlicensed IMTOs, urging citizens to avoid using them in overseas transactions.

Meanwhile,  the bank rose from the Monetary Policy Committee (MPC) meeting on Tuesday retaining all the major monetary parameters, including the Monetary Policy Rate (MPR) at 11.5 percent; asymmetric corridor of +100/-700 basis points around the MPR; Cash Reserve Ratio (CRR) at  27.5 percent, and liquidity ratio at 30 percent.

The apex bank cited inflation as a key influencer of the decision to retain all the parameters.

While the MPR is the benchmark interest rate in the country, the CRR is the “the portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest,” according to Investopedia, an online investment dictionary.

“The MPC felt that loosening will trigger excess liquidity and worsen inflation,” CBN governor Godwin Emefiele said after a two-day MPC meeting in Abuja.

“The MPC also felt that excess liquidity might impact demand pressure and fuel further depreciation of the naira,” he added.

He said the committee was of the opinion that the ‘hold’ decision would benefit the current fragile period and trigger the growth of the economy. ‘Hold’ means that all the parameters are constant or not changed.

Emefiele noted that MPC members felt that  inflation was substantially a supply side factor,  meaning there was a need to continue to focus on consolidation of recovery process by taking those steps that would continue to stimulate output growth while creating jobs.

“Most members voted in favour of reversing the trend and achieving medium-to-long-term economic stability,” Emefiele further said.

Analysts Speak

In a statement sent to The ICIR, director-general of Lagos Chamber of Commerce and Industry (LCCI)  Muda Yusuf said the holding policy
stance seemed to be most appropriate decision at this moment, considering recent macro developments in the economy.

Yusuf said the chamber  endorsed the position of the MPC on the need for fiscal authorities to expedite actions in addressing current economic challenges and other investment climate issues constraining the supply side of the economy and fuelling inflationary pressures.

“We request that the MPC to give more attention in its deliberations to the foreign exchange policy because of its profound implications for economic performance and the confidence of investors,” he said.

“The forex policies are as important as liquidity management concerns. Foreign exchange framework is key to the price stability mandate of the CBN. The Chamber notes with concern the divergent positions of both the fiscal and monetary authorities on the country’s foreign exchange policy framework. It is important for the fiscal authorities, CBN and Economic Advisory Council to be on the same page as far as the country’s foreign exchange policy framework is concerned,” he noted, adding that lack of coherence among policymakers sent a negative signal to the investment community, aggravated uncertainty and undermined the confidence of investors.

An economic analyst  and managing director of MD Services Mathew Ibe justified the CBN’s position, saying that it was the best considering the current inflationary pressure and high unemployment,

“If you reduce MPR, for instance, you incur more inflationary pressure, and if you increase you suffocate the economy,” he said.

Financial Derivatives chief executive Bismark Rewane said earlier in the year when the  CBN also retained all the parameters that Nigeria had an inflation problem.



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    He attributed inflationary pressure, in an interview on Channels TV, to increasing money supply growth, devaluation effect, Boko Haram, logistics and distribution costs, among others.

    Nigeria’s inflation rose to 17.33 percent in February 2021, from 16.47 percent reported in January 2021, according to data from the National Bureau of Statistics (NBS).

    CBN retains interest rate, warns against second lockdown

    Growth in the fourth quarter of 2020 was merely 0.11 percent, which was insufficient to bolster the economy with a population growth rate of 2.6 percent, say analysts.

    Unemployment rose to 33.3 percent in the last quarter of 2020, from 27.1 percent in the second quarter, NBS data noted.

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