Access, Zenith, Other Nigerian Banks Begin Sale of Dollars to Nigerians as Naira Falls Slightly
- Nigerian banks have commenced the sale of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) to their customers
- First Bank of Nigeria announced to its customers in a statement that they can now apply for PTA, BTA, school fees, and medical fees under Form A
- The move by the makes indicates the availability of foreign exchange after a long drought
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Some commercial banks resumed selling their customers Personal Travel Allowance (PTA) and Business Travel Allowance (BTA), showing a shift in FX availability after a prolonged supply shortage.
The development came as financial institutions adjusted to market demands and the Central Bank of Nigeria (CBN) policy changes.
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First Bank kickstarts the sale of BTA, PTA, others
Nigeria’s oldest financial Institution, First Bank, announced the resumption of FX sales for various international transactions.
The bank stressed that customers can now access FX for PTA, BTA, Payment of school fees, medical bills and other authorised transactions under Form A.
It said that Form A applications, including school fees, student upkeep, PTA, BTA, and medical bills, must be processed via the CBN’s trade monitoring systems (TRMS) portal, with all needed supporting documents uploaded to ensure a seamless application process.
Experts say that when the gap between the official and black market rates was marginal, customers received little incentive to approach banks for PTA.
CBN mandates IMTOs to pay Nigerians in naira
According to them, the shift aligns with the apex bank's policy adjustments over the past year to stabilise the FX market.
Early last year, the CBN directed International Money Transfer Operators (IMTOs) to quote FX rates for naira payouts based on the existing market prices, showing a move toward market rates.
In February, the apex bank removed inhibitions on the spread of interbank forex transactions and limits on the sale of interbank proceeds.
CBN also mandated that PTA and BTA payments be made via electronic channels to forestall round-tripping.
BusinessDay reports that the banks' resumption of PTA and BTA sales may show improvements in FX liquidity and the complexities of wading through Nigeria’s financial landscape.
Janet Ogochukwu, a senior banker with one of the new-generation banks, revealed that the move was a good one and would reduce the pressure in the FX market, especially the parallel segment.
“The gap between the two windows is about N100, and the new measure will narrow it. But the CBN and the banks need to do more, especially the CBN, which needs to pump FX into the parallel market to reduce volatility,” she said.
The development comes amid the continued depreciation of the naira in the official window.
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The naira depreciates slightly in the FX market
CBN’s Electronic Foreign Exchange Market System (EFEMS) data shows the naira depreciated slightly against the US dollar on Tuesday, January 21, 2025.
The naira opened trading negatively at 0.16% on Tuesday, January 21, 2025, at N1,549.50 per dollar, slightly stronger than Monday’s rates.
However, the local currency fell 0.18% to close at N1,552.78 per dollar, showing a slight depreciation of N1 from the previous day’s rate of N1,551.
Currency traders quoted the naira at a high of N1554.25 and a low of N1,1549.50 per dollar.
CBN adjusts exchange rates
Legit.ng earlier reported that the Nigerian naira maintained its week-long losing streak on Wednesday, January 15, 2025, falling by 0.09% in the Electronic Foreign Exchange Market System (EFEMS).
The naira opened trading negatively at N1,549 per dollar, the same rate it closed the previous day.
At the end of trading on Wednesday, January 15, 2025, the naira depreciated by 0.09% to trade at N1,551.10 per dollar.
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Source: Legit.ng
