In the effort of the Apex Bank to ease the difficulty encountered by Nigerians in obtaining funds for FX Transactions, the CBN will commence direct additional funding to banks to meet the needs of Nigerians for Personal Travel Allowance, Business Travel Allowance, Medical Bills and School Fees. This was contained in the press release by the Apex Bank on Monday 20th of February 2017 and signed by Mr. Isaac Okorafor, the Acting Director of Corporate Communications at the CBN.
The FX sales which is to commence immediately and to be on a weekly basis going forward, will be sold by banks at a mark up price of not above 20% of interbank rate. The interbank rate stands at 305/$ as at date. The sales will be to customers that has met the requirement for FX sales.
The CBN also state in the press release that
• It will reduce forward sales for all outstanding and near forward LC Transactions form 180 days to 60 days.
• Banks to be directed to open FX sales outlet at major airports as son as logistics permits to ease the sales of PTA and BTA to customer that meet the requirement.
In order to increase efficiency and maintain confidence in the FX market the CBN will immediately take the following steps
• Begin the implementation of all its programs to clear all unfilled orders in the interbank FX market.
• Allocation and utilization rules will no longer be imposed on banks
• Advise FMDQ to activate its FX order book as soon as possible and also accelerate the on-boarding of FX relationship system to ensure transparency.
The Policy direction as contained in this press release is a welcomed development as it will bring succor on parent and guidance who have been under immense burden to sources FX at astronomical rates to pay school fees and upkeeps for their wards abroad. Same for people on medical trips and vacations.
The reduction of forward obligation days from 180 days to now 60 days and willingness of the Apex bank to clear outstanding obligation is also a good sign that Naira may be on its road to recovery soon.
The advise to FMDQ, (The body that brings together all fixed income and currency operators in the country) if implemented will also ensure sanity in the FX market in the country.
Analyst are of the opinion that Naira may be on its road to recovery or at best the free fall of Naira may be curtailed with this new policy direction of the CBN.