Nigerians looking to travel abroad can purchase dollars as personal or business travel allowances via their commercial banks.
This is contained in a circular issued by the central bank of Nigeria reminding customers that forex purchase for holiday purposes is still possible.
Unbeknownst to some Nigerians, the travel allowance related purchases are still possible even as the central bank introduced the new foreign exchange market guidelines.
What the CBN is saying
According to the CBN, bank customers looking to purchase forex via PTA/BTA can meet their banks and that all eligible transactions still as to be at the market determined rate.
- “The general public is also reminded of the continued availability of PTA/BTA from their banks to meet their personal and business travel requirements, and that all legitimate and eligible foreign exchange transactions are expected to be completed in the NFEM, at the market determined exchange rate.”
The market determined rate is the official rate that forex is being sold at the Nigerian foreign exchange market and may not be the same as the closing rate, intra-day high or intra-day low rates.
For example a buyer may get a rate of N1530/$1 and another N1530.5/$1 depending on the time the bid was placed and the transaction consummated.
What we know
Information reaching Nairametrics suggest most Nigerians seeking forex as travel allowances may not be aware that they can still do so via their commercial bank.
- This is likely due to the several policies introduced by the apex bank during the year in a bid to usher in a more transparent market for forex.
- Checks by Nairametrics suggest some of the commercial banks we reached out noted that forex was available to sell, however some bank branches who did not have referred to their larger branches.
- Our findings also indicate that despite the N100 margin between the official and parallel market rates, most Nigerians preferred to purchase from parallel market operators.
Most of them attribute this to the ease of accessing forex in the parallel market where documentations are not required.
Back story
In a circular recently issued by the central bank, Bureau de Change (BDC) operators were granted “temporary permission” to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM).
- This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period.
- The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department.
- The arrangement will be in effect from December 19, 2024, to January 30, 2025.
- Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.