CBN Refutes Alleged Short Supply Claims by Banks

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  • CBN Refutes Alleged Short Supply Claims by Banks

The Central bank of Nigeria (CBN) has refuted insinuations by some banks, which are declining sale of foreign exchange (forex) to customers on the claims of inadequate supply.

This means that the ongoing exchange rate gains at the parallel market through the forex interventions may soon be lost going by indications.

The development would now put on hold the free flow of forex in the liberalised retail segment of the market- personal travel allowance, medical tourism, school fees, among others, allowing a come back of the speculators.

The apex bank, which confirmed the worrisome development, said information reaching it showed that some customers seeking to buy forex for business/personal travel allowances, medical and school fees are being frustrated by some banks with the false claim that the CBN is not allocating enough forex to them for BTA, PTA, Tuition and Medical fees.
While the banks’ challenge over CBN’s reforms has always been with margins allowable, which they have consistently declared inadequate in several instances, it is not clear what could have prompted this one.

According to the CBN’s spokesman, Isaac Okorafor, such claim is totally untrue.

“All banks have more than enough stock of forex in their possession for the purpose of meeting genuine customers’ demand for BTA, PTA, tuition and medical fees.

“Indeed, on a weekly basis, the CBN has been selling at least $80m to banks for onward sale to their customers for these invisible items,” he said

He asked members of the public seeking to buy forex for the above-mentioned purposes to go to their banks and obtain their forex.

“Any customer who is not attended to within 24 hours for BTA/PTA or 48 hours for tuition and medical fees should call 07002255226 or send an email to cpd@cbn.gov.ng, with the name and branch of the non-cooperating bank.

“Furthermore, no customer should accept to buy forex from any bank at more than the currently prescribed rate of N360/$,” he added.

It had on Monday, further liberalised the retail segment of the foreign exchange market to N360/$ after five weeks when it first adjusted the rate to between N366/$ and N375/$.

While the last policy was expressly determined by a 20 per cent mark up of prevailing exchange rate at the interbank market, the new decision now puts the rate at N360/$ flat for the retail segment.

By the new rule, CBN has been selling to banks at N357/$, while banks are to resell to end users at N360/$ and at the same time, reflect the new rates in the banking halls of respective their branches immediately.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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