New foreign exchange policy will strengthen naira — CBN


The newly introduced foreign exchange policy by the Central Bank of Nigeria (CBN) will help shore up the naira, an official of the bank has said.

The Special Adviser to the CBN Governor on Financial Markets, Emmanuel Ukeje, said this in Abuja on Thursday.

Ukeje described as baseless the argument by sceptics that the newly introduced foreign exchange policy would further weaken the naira.

“The whole essence of the new policy is to infuse dollar liquidity into the system and to ensure easy accessibility of end users.

“In the past, we have had clamours that people were not able to pay their school fees, people were not able to buy BTA and that is why they had to go to the black market or parallel market.

“Now that the CBN have come up with a policy that has returned this into the confines of the inter-bank market and that of the bank, we believe strongly that this will take the demand off the parallel market and we expect that the Naira will strengthen as this goes on.

“In essence, it means that people who have children overseas and those who have to pay school fees or want to travel don’t have to bother rush to BDCs to be buying money or to go parallel market.

“They can now source this easily from the banks and that for me is a very big positive.”

It will be recalled that the CBN, rolled out a new policy on Foreign Exchange aimed at easing access to foreign currencies for personal, business, travel, educational and medical purposes, among others.

The CBN later provided 370.9 million dollars to 23 banks to meet the visible and invisible requests of customers.

The CBN further directed all banks in the country to open foreign exchange retail outlets at major airports as soon as logistics allowed them.

Ukeje said to make foreign exchange readily accessible to customers, the CBN also eliminated stiff conditions in applying for Basic Travel Allowances (BTA) in banks.

“We have tried as much as possible to simplify the access of this particular fund.

“The issue of tax clearance, we all know that it has been an issue because not many people can produce their tax clearance and for those who can, some can also easily produce fake tax clearance and the process of verifying this is very difficult.

“So the central bank has waved the issue of tax clearance provision in accessing these funds and all you need to do is basically your journey must originate from Nigeria, travelling out.

“You cannot leave overseas and buy BTA to travel. You must have a valid ticket to travel with and as a matter of fact, you must have a bank account and BVN to recognise you as a bank account holder.

“Basically you are entitled to basic travelling allowance every quarter and up to the sum of 4,000 dollars. And mind you, there is a caveat as it’s only those that are 18 years and above that can access that.

“There is also a condition that you must be embarking on a journey that is not less than five hours. So it does not mean that when you are going to Cotonou or Ghana you come and apply for a BTA.

He reiterated that to avoid round-tripping, the policy allows for school fees and medical fees to only be paid directly to the school or hospital.

Ukeje gave assurance that banks will comply with the new directive and not make it difficult, thereby sending customers back to the black market.

“I think the banks will do that because in the past the problem they had with the BDCc was certifying that these BDCs can be dealt with. And most of them, the banks were scared because they were not sure of the ownership of the BDCs.

“That was why some of them retained but now they have to do it directly. And don’t forget that the banks are directly under the supervision of the CBN.

“As a matter of fact, as I speak to you today the fund that was given to them yesterday, they are supposed to render returns today with regards to utilisation by the close of business today.

“So 24 hours after they get that money, they are supposed to render returns on utilisation and there is no way they are not going to comply.

“So we are very positive that banks being under the supervision of the CBN have no choice with this directive,” he said.

Ukeje said that for the CBN, allocation of foreign exchange to develop the manufacturing, agric industrialisation remains the apex bank’s priority.