The Central Bank of Nigeria, CBN is relaxing its stringent foreign exchange policy to make the funds available to Nigerians to facilitate business transactions and meet other personal needs.
The new measure will see forex flow around those transacting legitimate business, parents seeking to pay their wards school fees.
The Bank in a statement said it is continuing its efforts to increase the availability of forex to ease the difficulties encountered by Nigerians in obtaining funds for forex transactions.
To achieve this the apex bank will be providing direct additional funding to banks to meet the needs of Nigerians for Personal and Business Travel, Medical needs, and School fees, effective immediately.
The CBN expects such retail transactions to be settled at a rate not exceeding 20 percent above the interbank market rate.
In the new regime which furthers seeks to ease the burden of travellers and ensure that transactions are settled at much more competitive exchange rates, the CBN has directed all banks to open forex retail outlets at major airports as soon as logistics permit.
It said that having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, the would 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.
“All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements,” the bank said.
Similarly, the CBN 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 said it would ensure that the process is as smooth as possible and that as many customers as possible get the foreign exchange they genuinely demand.
This it notes would also apply to customers seeking to make payments, or purchase foreign exchange, for medical bills and paid directly to hospitals, assuring that 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 also 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 the transaction.
Similarly, to maintain confidence in the forex market, the CBN announced the immediate implementation of its articulated program to clear all the unfilled orders in the interbank forex market;
“Given our plan to meet all unfilled orders, and while provision of FX to the manufacturing sector would remain the CBN’s strong priority, we will no longer impose allocation/utilization rules on commercial banks, the statement said, adding that it will also implement an effective intervention programme to support the inter-bank market to ensure adequate liquidity necessary to deliver an efficient forex market;
The bank will, “Advise FMDQ to activate its FX Order-Book systems as soon as possible and also accelerate the on-boarding of FX clients on the FX Relationship Systems to ensure total transparency of the FX market.
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” the statement signed by Isaac Okorafor
Acting Director, Corporate Communications of the bank said.