Menu

The Central Bank of Nigeria announced today that it will immediately begin to provide foreign exchange to banks to meet retail FX demand, including personal and business travel allowances, medical expenses, and school fees.

The apex bank said it expects all such FX transactions to be settled at a rate not exceeding 20 per cent above the interbank rate.

“In continuation of efforts to increase the availability of foreign exchange in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, the Central Bank of Nigeria is 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 apex bank said.

The CBN has further directed banks to open FX retail outlets at major airports in order to provide for travellers and “ensure that transactions are settled at much more competitive exchange rates.”

The apex bank said it has also reduced the tenor of its forward sales from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction in order to provide FX to all end users.

Among steps taken to increase the efficiency of the interbank FX market, the apex bank said it would (1) begin to implement a programme to clear all unfilled orders; (2) no longer impose allocation/utilization rules on commercial banks; (3) implement an effective intervention programme to ensure adequate liquidity; and (4) 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.

With the rollout of the new policy actions, the CBN said it would not hesitate to bring serious sanctions on offenders, even if they are CBN staff members.

“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,” added the banking regulator.