THE Bankers’ Committee has agreed to support the Central Bank of Nigeria’s latest effort aimed at ensuring dollars are available to foreign exchange (forex) end-users. Rising from its meeting held recently, the committee said making forex available to end-users for business and personal travel allowances will help in relieving pressures on Naira.
According to them, the Bureaux De Change (BDCs) will continue to have their weekly allocations, and the banks will have their allocations too.
“We want to ensure that all the touchpoints where Nigerians go to purchase dollars are well funded. That’s why the CBN is giving more dollars to banks and funding for BDCs will continue,” the committee said.
The apex bank’s Director, Banking Supervision, Haruna Mustafa, said the Bankers’ Committee discussed a range of other issues. He said there are ongoing plans by the CBN in collaboration with the managing directors of banks to launch domestic cards, even as he said the pilot phase of digital currency will be launched before the end of the year and will be accessible to all Nigerians thereby helping to promote financial inclusion.
Group Managing Director, Access Bank Plc, Herbert Wigwe, said the committee also decided that all card schemes will be registered locally to enhance the efficiency of the payment system.
“It will also minimise the funds spent by banks in card transactions thereby helping to conserve foreign currencies”, he said. Recall that the House of Representatives recently directed the CBN to urgently put in place a policy to check further devaluation of the Naira to Dollar and other international legal tenders. They expressed concern that long-term devaluation of the local currency may lead to lower productivity because of the decline in incentives, adding that devaluation also makes it more difficult for Nigerian youths especially in the IT sector whose businesses are online and must necessarily transact businesses in US dollars and also reduces real wages.
Meanwhile, Governor of the CBN, Godwin Emefiele, has cautioned bankers to desist from denying customers, particularly travellers, the opportunity to purchase foreign exchange. This is 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) proceed. Accordingly, the CBN may release hotlines for aggrieved customers to report banks that fail to sell foreign exchange to them even after providing required documentation.
Expectedly, experts say the forex supply will exert more pressure on foreign reserves.
Nigeria’s gross external reserves maintained a bearish trend in the first quarter to close at $34.24 billion on May 28, 2021. Year to date, the external reserves have depleted by 3.19 per cent ($1.13 billion). The depletion in the reserves level is a result of the CBN’s ongoing forex interventions.
Meanwhile, the current external reserves level, according to the experts, is sufficient to cover 8.40 months of imports and payments in the economy down from 8.56 month on April 30.
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