The Central Bank of Nigeria (CBN) is taking a strong stance against the "war" between the US dollar and the Naira, implementing a series of measures aimed at curbing foreign exchange malpractices and bolstering transparency in the market. In a recent circular, the CBN has directed all authorized dealer banks to process Personal Travel Allowances (PTA) and Business Travel Allowances (BTA) exclusively through electronic channels such as debit or credit cards. This means cash payouts in dollars are no longer permitted.
CBN Director of Trade and Exchange Department, Dr. Hassan Mahmud, emphasizes that this policy shift is crucial for promoting transparency and stability in the foreign exchange market. It aligns with the bank's commitment to combatting forex malpractices and reflects the growing trend towards electronic means for accessing travel allowances.
The circular references existing regulations outlining eligibility criteria for accessing PTA/BTA, but emphasizes the strict prohibition of cash payouts moving forward. "Authorized Dealers and the general public are hereby to note and comply accordingly," the circular states.
This policy comes amidst significant dollar scarcity challenges faced by the CBN. Governor Yemi Cardoso previously highlighted the impact of foreign education and medical tourism, with an estimated $40 billion spent in these sectors, contributing to the Naira's depreciation.
To address these challenges, the CBN has also implemented restrictions on International Money Transfer Operators (IMTOs). These operators are now limited to inbound transfers only, and all international transfers must be paid out in Naira. This policy, impacting major IMTOs like Western Union and MoneyGram, is part of a broader effort to stabilize the foreign exchange market and protect the value of the Naira.
The CBN's recent actions demonstrate its determination to combat forex challenges and strengthen the Naira. While the "war" with the US dollar may not be easily won, these policy shifts indicate a commitment to transparency, stability, and responsible foreign exchange management.
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