As part of the strategies at increasing foreign exchange availability in the Nigerian foreign exchange market and the need to reduce the difficulties Nigerians encounter in accessing fundsfor some invisible transactions, The Central Bank of Nigeria (CBN) has issued some new policy guidelines.
According to the circular, (FMD/DIR/CIR/GEN/08/003) of February 20, 2017 signed by the bank’s Director, Financial Markets Department Dr Alvan E. Ikoku, the new policy is expected to take care of forex sales for Personal Travel Allowance (PTA) and school fees among others.
The highpoints of the new CBN’s forex Policy guidelines are as follows:
- CBN to commence weekly sales of forex to banks classified as: merchant banks, small, medium and big banks. The sales will be for Personal Travel Allowance (PTA), Business Travel Allowance (BTA) and school fees, and sale shall be every Tuesday.
- Applicants/Beneficiaries for sale of PTA can then purchase directly from the commercial banks provided they meet the following conditions: *Applicants/Beneficiaries must be eighteen years (18) of age and above; Applicants/Beneficiaries must be holders of the Nigerian passport; Applicants/Beneficiaries must be account holders in their chosen banks and ready to present verifiable BVN to their bankers; PTA shall only apply to journeys of not less than five (5) hours flight time; the sale of PTA shall be for travel to be undertaken not more than 14 days from the day of purchase of the PTA; the flight must originate from Nigeria; Applicants shall be entitled to $4,000.00 per quarter.
- Forex for School fees: Remittances shall be made directly by the banks to the school’s account, for an amount not exceeding $15,000.00 or its equivalent per term or semester; with duly completed Form ‘A’; admission letter and invoice from the school; Applicants should be recognized parents/guardians and also present verifiable BVN to their bankers.
- Banks are to receive Forex commensurate with the weekly demands to be sold to customers.
- All retail transactions to be settled at a rate not exceeding 20 per cent above the prevailing inter-bank market rate.
- The CBN to sustain forex supply to retail end-users, (PTA, BTA, School fees, medical bills.)
- CBN’s forward sales tenor reduced from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction.
- Banks are to open Forex retail outlets at major airports as soon as logistics permit, so as to ease travellers’ stress and ensure settlement on transactions.
- The CBN to give priority Forex allocation to the manufacturing sector.
- All banks to submit a daily report of their forex sales of PTA and School fees to the CBN before close of work and in the right format and with right details as directed or be sanctioned in case of lapses.
From the above, it is obvious some of the previous forex allocation/utilisation guidelines on commercial banks have been adjusted and we look forward to a real easing of the difficulties encountered by Nigerians while trying to access forex for their Personal Travel Allowance and school fees, among other transactions.
Although the system has witnessed policies adjustments or reversals in the last couple of months; however a lot of people are asking if this will be the last of the forex policies in a period of economic recession? Will this latest policy be long before another set of policies come up in the nearest future? Meanwhile, many are of the opinion that the banks should be strictly monitored in order not to upset the good intentions of the policy. The time to think and act is now; these are life and business essentials, so let’s keep thinking clearly!
Other relevant sources include: CBN’s circular: (FMD/DIR/CIR/GEN/08/004) of February 21, 2017; Press Release on New Policy Actions in the Foreign Exchange Market, signed by the CBN’s acting Director of Communications, Isaac Okorafor, 20/2/17(www.cbn.gov.ng).
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