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The Central Bank of Nigeria (CBN) has directed banks and authorized bureaux de change to sell forex to intending Hajj pilgrims at a concessionary rate of N197 a dollar. This represents a 36% discount off interbank rate or 50.7% discount compared to parallel market rates.

The naira was traded at N310 per dollar at the official interbank market on Thursday while parallel market rates hovered around N400.

This is the first time the CBN would be selling forex below the official interbank market since it re-introduced a floating exchange rate policy on June 20th.

President Muhammadu Buhari, who had publicly opposed a policy move that would devalue the naira, seemed to criticize the flexible exchange rate policy, barely one week from its introduction, as the naira plummeted from the abandoned fixed rate of N197 per dollar to N282. He told a gathering of business leaders on June 27th: “How much benefit can we derive from this ruthless devaluation of the naira? I'm not an economist neither a businessman - I fail to appreciate what is the economic explanation.”

However, in a circular issued on Thursday, the CBN said intending Hajj pilgrims are entitled to a minimum of $750 and a maximum of $1,000 as personal travel allowance (PTA).

The CBN’s decision comes a month before the beginning of the 2016 Hajj pilgrimage, which holds from September 9th to 14th.

“The Federal Government has approved that intending pilgrims are to be sold the PTA at a concessionary exchange rate of N197 to the US dollar,” the apex bank said in the circular signed by W.D. Gotring, the CBN’s Acting Director of Trade and Exchange. “No commission shall be charged by banks for the sale of the PTA to the intending pilgrims.”

The CBN said it will sell the PTA to the designated banks in Lagos and Abuja and the accounts of the respective banks will be debited as soon as the funds are disbursed.

“Each designated bank is required to sell to the CBN the unutilized funds not later than two weeks from the date of the last inward flight to Nigeria from Jedda, while the accounts of the banks shall be credited promptly,” said the CBN.