By Nse Anthony-Uko,
ABUJA, (Sundiata Post) – The Central Bank of Nigeria (CBN) would henceforth be providing direct additional funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, at exchange rate not exceeding 20 per cent the interbank rate, which currently stands at N305 per dollar.
A new directive on foreign exchange policy in the country released by the CBN takes immediate effect.
The new policy is sequel to last Thursday’s directive by the National Economic Council, NEC, for immediate review to stem the widening gap between the inter-bank foreign exchange and parallel market rates.
Acting Director, Corporate Communications, Mr Isaac Okorafor in a statement on Monday, noted that “Having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, the CBN would immediately begin to provide foreign exchange to all commercial banks to meet the needs of both personal travel allowances (PTA) and business travel allowances (BTA) for onward sale to customers.
The CBN also directed all banks to open FX retail outlets at major airports as soon as logistics permit, in order to further ease the burden of travellers and ensure that transactions are settled at much more competitive exchange rates.
All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.
Similarly, the CBN it would meet the needs of parents, guardians and sponsors who are seeking to make payments of school and educational fees for their children and wards. Such payments must be made by commercial banks directly to the institution specified by the customer. The CBN would ensure that this process is as smooth as possible and that as many customers as possible get the foreign exchange they genuinely demand. This would also apply to customers seeking to make payments, or purchase foreign exchange, for medical bills and paid directly to hospitals. The supply of FX to retail end-users (PTA, BTA, School fees, medical bills, etc) would be sustained by the CBN.
In order to further increase the availability of foreign exchange to all end-users, the CBN has decided to significantly reduce the tenor of its forward sales from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction.
“Given the CBN’s objective to continuously and vigorously pursue a transparent, liquid, and efficient FX Market, the Bank reiterates it would neither tolerate unscrupulous actions nor hesitate to bring serious sanctions on offenders, be they banks or their staff. The Bank therefore encourages market participants to assist in ensuring that these new measures engender the preservation of our external reserves, stability of our financial system, and growth of our economy to the benefit of all Nigerians,” it said.