The Central Bank of Nigerian (CBN) in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, has issued a new forex policy on the Monday, February 20.
The policy would be providing direct additional funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, effective immediately.
This policy will also dictate how things work with the Nigerian foreign exchange market. Here are 8 things you need to know about the new forex policy.
1. The policy is directed at the retail end of the market where the scarcity is worst. This is the market that used to be served by the bureau de change (BDCs).
2. The new forex policy aims to ensure supply of dollars for personal and business travel allowances for those who need to travel on holiday or business.
The new policy will be available for medical needs, people who need to pay for medical services abroad and school fees for those who need to pay school fees of their wards schooling abroad.
3. This new policy will ensure that the sale of forex to banks will be done weekly by CBN. These categories of people will also get forex easily from commercial banks.
4. This new policy has also made provision for each bank to receive amounts commensurate with their demand per week. This means, the bank that gets patronized the most from customers will get the most dollars from CBN.
5. The new forex policy will ensure that anyone and everyone who is qualified for personal and business travel allowance gets it. The CBN has also directed all banks to open foreign exchange retail outlets at major airports as soon as logistics permit.
6. The logistics permits implies that banks don’t have a timeline to open outlets at various airports. This is a double-edged sword as banks with outlets could sell at a premium.
7. This new policy will allow the three major international airports we have in Nigeria, Lagos, Abuja and Kano to be a foreign exchange market. With Abuja Airport set to be closed, it is likely that Kaduna airport will soon be an FX destination.
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8. With this new forex policy all banks without an outlet at the major airports will not joining the likes of travelex, UBA, First Bank, GTB, Zenith to sell forex to consumers.