Following last Thursday’s directive by the National Economic Council (NEC) for immediate review of the FOREX policy to stem the widening gap between the inter-bank foreign exchange and parallel market rates, the Central Bank of Nigeria (CBN) has explained that its new foreign exchange policy is to cushion the hardship faced by Nigerians in paying school fees abroad, medical bills and travel expenses.
The policy announced on Monday takes immediate effect.
The NEC meeting presided by Acting President Yemi Osinbajo had expressed concern over the prevailing exchange rate situation in the country, especially the widening gap between inter-bank and the parallel market rates.
While inter-bank rate, which is the official exchange rate approved by the CBN, stood at about N308.50 to the dollar, the rate at the parallel market, which is readily accessible by most Nigerians, rose to as high as N510 to the dollar last week.
The Bank, in a statement on Monday by its spokesperson, Isaac Okorafor, explained that the new policy was to ease the difficulties encountered by Nigerians in obtaining funds for FOREX transactions.
Consequently, the Central Bank said henceforth it would be providing direct additional funding to deposit money banks to meet the needs of Nigerians for personal and business travels, medical needs, and school fees.
Such retail transactions, the CBN said, would be settled at a rate not exceeding 20 per cent above the inter-bank market rate.
On travel allowances, the Central Bank said it would immediately begin to provide FOREX 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 CBN said in a statement.