Airline Operators Deny Hike in Exchange Rate, Says They Don’t Fix Rates in Nigeria
- International Air Transport Association (IATA) has debunked reports that it fixed the exchange rate in Nigeria.
- The body said it is not responsible for the increase in exchange rates which affects international airfares in the country.
- IATA said it is wrong to describe the fares as IATA fares stating that the Nigerian financial system sets them
The International Air Transport Association (IATA) has clarified that it is not responsible for fixing the exchange rate applicable to international flights in Nigeria.
The statement by IATA comes after reports emerged that the body was behind the recent hike in exchange rates by foreign airlines in Nigeria.
Source: Getty Images
IATA debunks reports of rates selecting in Nigeria
IATA responded to the reports stating that the body does not set the exchange rate applied to foreign and international flights sold in Nigeria and that it is incorrect to describe them as the IATA exchange rate.
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Punch reports that the body said airfare for international flights from Nigeria is denominated in US dollars and converted into the local currency for sale in the Nigerian market.
The conversion process uses the official exchange rate the Nigerian financial system gives.
How IATA applies exchange rates to international flights
IATA says it uses an on-the-spot rate at which the apex bank, the Central Bank of Nigeria, sells dollars through the banks to the market at biweekly retail foreign exchange auctions.
Per the statement, the rate is fixed; if the rate at which the CBN sells US dollars goes up, the exchange rate applied to airfares will be adjusted automatically.
Legit. ng reported earlier that the exchange rates for international air tickets in Nigeria increased recently by 37.5% above the official exchange rate of N461.1 per dollar to N634 per dollar.
The increase has resulted in international airlines increasing their fares significantly in the country.
IATA’s statement reads:
“IATA does not determine the exchange rate applied to international flight tickets sold in Nigeria, and it is incorrect to describe them as the “IATA exchange rate.”
“Air fares for international flights from Nigeria are denominated in US Dollars and converted into Naira, the local currency, for sale in the Nigerian market.
“These conversions use the official prevailing exchange rate provided by the country’s financial system.
“IATA simply applies the spot rate at which the Central Bank of Nigeria sells USD through banks to the market at its fortnightly retail foreign exchange auctions. The rate is not static, i.e., if the rate at which the CBN sells USD goes up, the exchange rate applied to airfares will follow and vice versa.”
"No More N900K": Airfares to the US, UK, and others get expensive as airlines adjust the naira to dollar exchange.
Legit.ng reported foreign airlines operating in Nigeria had raised their Rate of Exchange (RoE) from N610 to N634 per dollar.
As a result, Nigerians traveling to the United States, United Kingdom, and other countries will experience increased ticket prices.
In recent months, there has been an increase in the number of Nigerians seeking to leave the country for purposes such as studying, working, or receiving medical treatment.
Source: Legit.ng
