CBN raises FOREX allocations to banks

With the parallel market exchange rate soaring, the Central Bank of Nigeria (CBN) has announced an increase in the amount of foreign exchange supplied to banks.

The CBN move was in response to increased demands from travelers seeking foreign cash for travel allowances, tuition, medical costs, and other Invisibles.

The CBN governor, Mr. Godwin Emefiele, at a meeting with the Managing Directors of Deposit Money Banks (DMBs) warned banks to stop denying customers the opportunity to purchase foreign exchange.

This includes a foreign exchange for the purposes of Personal Travel Allowance (PTA), Basic Travel Allowance (BTA), tuition fees, and medical payments as well as Small and Medium Enterprises (SMEs) transactions or for the repatriation of Foreign Direct Investment (FDI) proceeds.

The warning is coming due to complaints and challenges faced by customers in accessing forex from bank warning that it will take action against any bank that denied customers the opportunity to purchase foreign exchange for legitimate purposes.

Acting Director, Corporate Communications Department of CBN, Osita Nwanisobi, confirmed the discussion between CBN and the bank chiefs on Sunday.

In a note issued, he added: “The CBN agreed to increase the amount allocated to banks for travellers, Small and Medium Enterprises among others. The banks also agreed to operate something akin to foreign exchange imprest account such that the coffers of banks will be replenished so long as they retire the initial amounts to the satisfaction of the CBN.”

Nwanisobi allayed fears of a forex shortage and urged members of the public seeking to purchase foreign exchange for PTA, BTA, payment of tuition fees or medical fees to do so from their banks.

CBN also released hotlines, email for aggrieved customers to report banks that fail to sell foreign exchange to them even after providing required documentation.

“Customers should approach their customer service representatives of their designated banks should they encounter challenges, or escalate complaints to the CBN via the bank’s toll-free line: 07002255226 or send an email to cpd@cbn.gov.ng if their requests are not met,” he said.

On Friday last week, the Naira was trading at N502/$1 on the parallel market, despite the fact that the official rate remained at N410.75/$1.

Similarly, on the black market the Naira fell to the British Pound Sterling at N710/£1, and the Euro at N608/€1.