Foreign exchange traders report that International Money Transfer Operators (IMTOs) are no longer diverting remittance inflows away from the official market, a development that is helping stabilize the naira alongside rising dollar sales from oil companies.

According to market operators, the sharp reduction in profit margins between official and parallel market exchange rates has eliminated the incentive for IMTOs to channel funds into unofficial markets. In recent weeks, the gap has narrowed so significantly that the parallel market rate has in some cases fallen below the official rate, reversing long-standing arbitrage opportunities.

The improvement comes as oil companies increase their dollar supply, diaspora remittances grow, and investor confidence strengthens. Active interventions and reforms by the Central Bank of Nigeria (CBN) have also played a major role.

Recent CBN policies include banning fintechs from holding IMTO licenses, lifting fixed exchange-rate caps, and expanding the categories of permitted remittance transactions, including person-to-person (P2P) and business-to-business (B2B) flows. These measures have pushed more inflows into official channels, boosting liquidity.

“Before now, remittances often ended up in the parallel market where higher margins made diversion profitable,” one forex trader told Nairametrics. “With oil companies now supplying more dollars and the spread nearly wiped out, IMTOs are finding it more attractive to sell through the official market.”

While some observers believe certain operators may still divert a portion of inflows, the broad consensus is that the bulk of remittances are now flowing into the formal system.

The shift is expected to support the naira in the near term, providing greater stability for businesses, investors, and households who depend on remittance inflows.