Forex

Forex: CBN, Banks to Verify Tax Clearance Certificates, Flight Tickets

Published

7 years ago

February 20, 2017

Forex: CBN, Banks to Verify Tax Clearance Certificates, Flight Tickets

As part of measures to implement the new foreign exchange measures to address the depreciation of the naira in the parallel market, the Central Bank of Nigeria, CBN, and commercial banks will collaborate with state governments to verify tax clearance certificates.

Meanwhile, economic experts have expressed doubts about the effectiveness of the measures, saying they were inadequate to address the depreciation of the naira in the parallel market.

The CBN,Friday, during a meeting of chief executive of banks, said it would provide dollars to banks to meet demand for Personal Travel Allowance, PTA, and payment of university school fees at N375 per dollar. These will, however, be subject to provision of Bank Verification Number, BVN, and tax clearance certificate.

For payment of school fees, the dollar will be paid directly into the account of the school subject to maximum of $15,000 per session, and minimum age of 18 years. For PTA, the travel destination must not be less than five hours from Nigeria.

The decision followed discussions on how to address the widening gap between the parallel market and interbank market exchange rates, which widened to N210.5 on Friday due to further depreciation of the naira in the parallel market to N516 per dollar.

A source at the meeting said the tax clearance certificate was introduced to ensure that only people with genuine needs for foreign exchange can access the dollars made available for these purposes.

The source said the CBN and the banks also decided to work with state governments to set up tax clearance verification platform, that banks will use to verify the authenticity of tax clearance certificates submitted by end users for dollar purchase.

The source also said this would also be extended to flight tickets. He said though some banks already have flight ticket verification platforms, this will be extended to the whole industry. He said this was to deter the use of fake tax clearance certificates and flight tickets to access dollars for PTA and university school fees.

Experts express doubts

Economic experts are, however, doubtful about the effectiveness of these measures.

Managing Director/Chief Executive, Financial Derivatives Company Limited, Mr. Bismarck Rewane said: “The intention is good but the methodology will lead to more market segmentation, multiple exchange rates and inefficient resource allocation.

“What I will recommend is that the CBN should put in the market whatever dollar it wants to sell without discrimination, and this will lead to efficient allocation of resources and increase in market confidence.”

On his part, Managing Director/Chief Executive, Cowry Asset Management Limited, Mr. Johnson Chukwu, said payment of tax and purchase of foreign exchange were two separate things that should not be combined.

He said every Nigerian is entitled to foreign exchange for PTA and payment of school fees, and hence there should be no discrimination on the basis of tax payment.

In the same way, Mr. Kunle Ezun, a research analyst with Ecobank, said the measures will not have positive impact on the market.

He said what the CBN had just done was to create more problem in the market, by increasing the list of items excluded from the official forex market.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Naira

Dollar to Naira Black Market Today, April 25th, 2024

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

16 hours ago

April 25, 2024

Samed Olukoya

Naira to Dollar Exchange- Investors King Rate - Investors King

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,260 and sell it at N1,250 on Wednesday, April 24th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,300
Selling Rate: N1,290

Naira

Dollar to Naira Black Market Today, April 24th, 2024

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

2 days ago

April 24, 2024

Samed Olukoya

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,250 and sell it at N1,240 on Tuesday, April 23rd, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined slightly when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,260
Selling Rate: N1,250

Naira

Nigeria’s Naira Dips 5.3% Against Dollar, Raises Concerns Over Reserve Levels

Published

2 days ago

April 24, 2024

Samed Olukoya

Nigerian Naira depreciated by 5.3% against the US dollar as concerns over declining foreign reserves raise questions about the central bank’s ability to sustain liquidity.

The local currency has now declined for the third consecutive day since the Naira retreated from its three-month high on Friday shortly after Bloomberg pointed out that the Naira gains were inversely proportional to foreign reserves’ growth.

According to data from Lagos-based FMDQ, the naira’s value dropped precipitously, halting its recent impressive performance.

The unofficial market saw an even steeper decline of 6%, extending the currency’s retreat over the past three trading days to a staggering 17%.

Abubakar Muhammed, Chief Executive of Forward Marketing Bureau de Change Ltd., expressed concerns over the sharp decline, highlighting the insufficient supply of dollars in the market.

Muhammed noted that despite a 27% increase in traded volume at the foreign exchange market on Monday, the supply remained inadequate, forcing the naira to soften further while excess demand shifted to the unofficial market.

The dwindling foreign exchange reserves have been a cause for alarm, with Nigeria’s gross dollar reserves steadily declining for 17 consecutive days to reach $32 billion as of April 19, the lowest level since September 2017.

This worrisome trend has raised questions about the adequacy of dollar inflows to rebuild reserves, especially after the central bank settled overdue dollar obligations earlier in the year.

Samir Gadio, Head of Africa Strategy at Standard Chartered Bank, pointed out that while the naira had been supported by onshore dollar selling, the rally was likely overextended.

Gadio warned that the emergence of a dislocation in the market, with domestic participants selling dollars at increasingly lower spot levels was unsustainable and necessitated a correction.

The central bank’s efforts to stabilize the naira have been evident with interventions aimed at improving liquidity.

However, the effectiveness of these measures remains uncertain, particularly as the central bank offered dollars to bureau de change operators at a rate 17% below the official rate tracked by FMDQ.

Analysts, including Ayodeji Dawodu from Banctrust Investment Bank, foresee further challenges ahead, predicting that the naira will likely stabilize around 1,500 against the dollar by year-end.

Dawodu emphasized the importance of stabilizing the currency to attract strong foreign capital inflows, underscoring the significance of sustainable monetary policies in Nigeria’s economic recovery.

As Nigeria grapples with the repercussions of the naira’s depreciation and declining foreign reserves, policymakers face mounting pressure to implement measures that ensure stability and foster confidence in the economy.

The road ahead remains uncertain, with the fate of the naira intricately tied to Nigeria’s ability to address underlying economic vulnerabilities and bolster investor trust.