Tuesday, 13 September 2022 07:04

Banks slash forex for travels by 50% as scarcity worsens

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Banks have begun to reduce approval requests for Personal Travel Allowance and Business Travel Allowance to legitimate users.

The legitimate users will be able to access forex only once in two quarters, The Punch gathered.

Before this new development, banks had been granting approval to travellers who applied once every quarter.

Findings revealed that the development arose due to the lingering forex scarcity in the financial system.

First Bank said in a mail to its customers on ‘Updates on FX purchase’ that “The full Personal Travel Allowance and Business Travel Allowance ($4,000 and $5,000) respectively will now be disbursed into your FirstBank Travel Card. All applications will be in line with regulatory requirements.

“Kindly ensure that all PTA/BTA applications along with the approved Form A are submitted at the branch exactly 14 days before your proposed travel date. Sales are limited to two quarters a year.”

A member of the Monetary Policy Committee, Mike Obadan, said in his personal statement released by the Central Bank of Nigeria after the last Monetary Policy Committee that access of forex was a challenge.

He said, “On the part of the monetary authority, there is no doubt that it is in a difficult situation because of excess demand for foreign exchange in the face of rather uncomfortable foreign exchange supply situation.

“In the context of foreign exchange management, there is a need for a critical review of the structure of forex demand for invisibles payments abroad with a view to identifying the unessential elements for rationalisation.

“Some analysts have rightly wondered why the Bank should, for example, continue to provide foreign exchange to fund primary, secondary and undergraduate education abroad in an era of serious forex shortage. It is true that many public schools are in bad shape.

“But there are many good private schools at the primary, secondary and university education levels. If parents are willing to fund the very expensive foreign education, it will be far cheaper for them to educate the children in the most expensive and good private schools in Nigeria.”

CBN Governor, Godwin Emefiele, earlier in the year, announced the bank would stop the sale of foreign exchange to Deposit Money Banks by the end of 2022.

It had earlier stopped forex allocation to the Bureau de Change operators in 2021.

The CBN governor launched its programme tagged ‘RT200 FX Programme’ to boost forex supply in the country through the non-oil sector in the next three to five years.

“The RT200 FX Programme is a set of policies, plans and programmes for non-oil exports that will enable us to attain our lofty yet attainable goal of $200bn in FX repatriation, exclusively from non-oil exports, over the next three to five years,” he said.

 

Punch