Forex Restriction: The Challenges of Using Naira ATM Cards

Foreign currency notesBureau De Change Nigeria

I read some comments on Facebook that the reason for naira ATM cards Forex restriction is to curtail frauds. I am putting it out there now that the reason is not to curb fraudulent activities, the reason is because Deposit Money Banks (DMB) is finding it hard to off-set its forex transactions due to dollar scarcity caused by reduction in oil revenue. Since that is the most reliable means of servicing our Forex market.

My concern is if CBN is finding it hard to service banks and Bureau de change, how on earth do they expect parents to source for dollar for their kids abroad? Having it in mind that interbank Forex activities has been closed since last week Thursday and won’t be opened till 4th Jan, which means both money gram and western union outbound transfers are closed till 4th Jan. Leaving Nigerians abroad to their fate.

Currently a lot of Nigerian students/travelers are struggling to pay tuition fees, oversea medical bills, etc. because banks have slashed their international card spending limit. Now the same banks are asking customers to open a dollar account for dollar-denominated transactions. How many bank accounts do average Nigerian needs to live a normal life?

Here is what will possibly happen in January, 2016, the rush/demand for dollar, will drive naira to 300 against dollar at the parallel market if CBN does not pump more Forex into the parallel market while the interbank FX market remains shut throughout the festive period.

Another issue parents will have to deal with is the increment, using bank cards oversea allow one to access Forex at bank rates, usually between 220 to 225 depending on banks but from now on, they will have to deal with parallel market where prices are driven by speculators, we are talking about 265 upward.

These are hardworking parents doing all they can to ensure our future generation turn out well but what is our government doing to help the same cause?

My question is why our government keep shifting their responsibilities to the masses but yet enjoy our taxes?

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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