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UPDATE 1-Transferwise says no longer sending remittances to Nigeria under new FX rules

Published 17/12/2020, 15:10
© Reuters.

(Add central bank comment)
By Libby George
LAGOS, Dec 17 (Reuters) - Money transfer firm Transferwise
said on Thursday it will no longer send remittances to Nigeria
after new rules in the West African country changed the currency
of payment to the U.S. dollar from naira.
Nigeria's central bank last month changed a 2013 rule that
allowed payment in naira after the currency fell to a 3-1/2 year
low of 500 naira on the black market, widening the premium with
the official market quoted at 381 since July.
The bank said the change was to reduce arbitrage whereby
money transfer operators profited from unofficial channels.
Transferwise said it could no longer offer money transfer in
naira with its current set-up but was working to reopen
transfers.
Nigeria's central bank said on Thursday a few operators were
paying remittances in local currency, contrary to the rules. It
has said that Transferwise and Azimo were not licensed as money
transfer operators.
Rising dollar demand has been putting pressure on the naira.
Importers with obligations have scrambled for hard currency,
while providers of foreign exchange, such as offshore investors,
have exited after COVID-19 triggered an oil price crash.
Remittances or money transfers make up the second-largest
source of foreign exchange receipts in Africa's biggest economy
after oil revenues. Around $26.4 billion was sent to Nigeria
last year, according to the World Bank.
Nigeria is hoping it can attract more remittances from its
diaspora. But the World Bank expect remittances this year to
fall to 2015 levels of $20.2 billion.
Rival WorldRemit said it has started to pay out dollars in
Nigeria.

(Additional reporting and writing by Chijioke Ohuocha; Editing
by Bernadette Baum)

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