CBN Orders Banks to Give Customers N375 Per Dollar for School Fees, Medicals

The Central Bank of Nigeria (CBN) will soon increase the disbursement of forex to meet demands for payment of school fees for Nigerian students abroad, medical expenses, personal and business travel allowances.

According to Leadership the apex bank will henceforth give weekly allocations of $1million to Deposit Money Banks (DMB) in the country, while the banks would be expected to sell to their customers at the rate of N375 per dollar.

The National Economic Council (NEC) had on Thursday, February 16, urged the CBN to immediately review the exchange policy.

The council members had expressed concern over the current situation of the exchange rate and called for an urgent review of the forex policy, especially the gap between inter-bank’s and the parallel market’s rates.

A source in CBN on Friday, February 17, said that the apex bank is currently perfecting plans to effect weekly allocations of $1million for the DMB.

In recent times, the CBN, in meeting the dollar demand of the country, particularly for sectors that are crucial to economic growth and development, had regularly sold foreign exchange at the forwards end of the interbank market to clear the backlog.

Last month, the apex bank sold $660 million in three and five month currency forwards at an auction. Banks were asked to bid in a special currency auction targeted at clearing backlog of dollar obligations of manufacturing, airlines, agriculture and petroleum sector.

During the week CBN had released the total amount of dollar allocation to customers in December last year and January this year. Together, banks in the country had sold $2.83 billion for utilization in the critical sectors of the economy such as manufacturing, agriculture, raw materials, aviation, petroleum products amongst others in line with the 60:40 foreign exchange policy.

The CBN under the new 60:40 foreign exchange policy prioritizes forex sales to manufacturers, agriculture, plant and machinery, critical raw materials, among others, and requires banks to publish on a weekly basis the volume and value of foreign exchange that they sell, who they sell it to and for what purpose.

The banks, having sourced their foreign exchange from the CBN, International Oil Companies (IOCs) and other autonomous sources allocate it to their customers based on the 60:40 basis after it has been verified that the foreign exchange is not to be used for any of the 41 items that has been removed from the eligible forex list.

According to the apex bank, priority was given to manufacturing, raw material and agriculture above other demands as its disbursements are targeted at employment generating and wealth creating sectors of the economy.

In another development, Godwin Emefiele, the governor of the Central of Nigeria (CBN), has been asked to provide the federal government with an explanation into corruption allegations at the apex bank.

The Punch reports that the CBN was fired a query by the attorney-general of the federation and minister of justice Abubakar Malami (SAN) over allegations against the bank’s foreign exchange allocation and transactions.

According to Malami, on Wednesday, February 15, the fraud allegations against the CBN which were contained in several petitions to the AGF, were “supported by several documents.”